Southern Nevada’s commercial real estate markets continued to mend in the second quarter, according to a number of reports.
As it has during much of the recovery, the industrial segment proved the commercial market’s brightest spot in the quarter.
The vacancy rate fell to 6.8 percent, down from 9.6 percent in the second quarter of 2014, according to research firm Applied Analysis.
Net absorption came in at 1.85 million square feet, compared with 1.53 million square feet a year earlier.
Applied Analysis principal Brian Gordon said absorption will likely slow in coming months for lack of available space. Increased demand, in turn, should mean upward pressure on the average asking rent, which, at 59 cents per square foot per month, was the highest since the first quarter of 2010.
A fix is on the way for the shortage, though. Construction more than doubled to 2.79 million square feet, up from 1.17 million square feet a year earlier, Applied Analysis said. All of the second quarter’s space underway was sourced to nine projects. The biggest? Switch SuperNAP’s 343,400-square-foot server space and Ainsworth Game Technology’s 291,000-square-foot facility, both in the southwest valley.
Retail flashed less progress, although the sector remained relatively healthy overall.
The vacancy rate rose to 10.8 percent, up from 10.5 percent in the second quarter of 2014, according to numbers from research firm Xceligent and Commercial Alliance Las Vegas, the commercial real estate arm of the Greater Las Vegas Association of Realtors.
Net absorption was 87,202 square feet, much of it traced to discount grocer Save A Lot’s three new locations in the northeast, northwest and downtown Las Vegas.
In general, retail is enjoying a boost from gains in consumer spending and population, according to Applied Analysis. Local taxable retail sales are at record levels, and 10,122 new-home permits were issued from mid-2014 to mid-2015. That was up 15.1 percent from the same period a year earlier.
Office struggled the most, posting a vacancy rate of 20.3 percent, according to CBRE Las Vegas. That was down from 21.6 percent a year earlier, and down from a high of 25.4 percent in 2012’s first quarter.
CBRE’s research showed the most active industries in the second quarter’s office market included law firms, real estate companies, medical-related businesses and financial services. The most active submarkets in the recovery have been in the valley’s west, southeast and southwest, which have combined for 68 percent of all demand since the first quarter of 2012.
Also, with net absorption of 189,703 square feet, the second quarter brought the 14th straight quarter of positive absorption. Asking lease rates have risen to match, reaching $1.93 per square foot per month. That was up from $1.85 in the second quarter of 2014.
The biggest deal of the quarter was a 100,000-square-foot lease at 4750 Oakey Blvd. to hospital operator United Health Services.
Real estate-friendly
A consulting firm that helps simplify taxes for self-employed workers has given props to the Las Vegas Valley’s real estate business climate.
San Francisco-based Zen 99 ranked Las Vegas the nation’s third-best city for self-employed real estate agents, based on analysis of earnings, marketwide sales, percentages of self-employed brokers and affordability in the nation’s 70 biggest cities.
Only Denver and Aurora, Colo., placed higher.
At an average annual salary of $60,160, local agents easily outearned the nationwide industry average of $41,990.
The report also found a local, average monthly health insurance cost of $237, and median monthly rent of $967.
