NAIOP Southern Nevada — a commercial construction trade group — hosted national and local experts to speak about real estate in Las Vegas and across the U.S., along with the potential for upcoming changes in regulation and infrastructure projects.
During a Jan. 20 presentation at The Orleans, Thomas J. Bisacquino, president and CEO of NAIOP’s national chapter, spoke about shifts in the office, retail and industrial sector, along with setting the scene in Washington, D.C. with the incoming administration.
Bisacquino presented the national industrial market as a sleepy sector that has turned into a bustling market, mostly due to the advent of e-commerce.
Last year marked the fourth year the sector saw more than 250 million square feet in net absorption, he said.
Based on that number, industrial has increased by about 45 percent on a national level, with about 140 million square feet of net absorption in the industrial sector occurring in 2011, according to data from CBRE.
The local industrial market is also doing very well.
Garret Toft, first vice president at CBRE’s industrial division in Las Vegas, said net absorption was at about 3 million square feet, and the city has about a 4 percent vacancy rate. And in 2017, the market will add about 6.5 million square feet of industrial space and vacancy will stay low.
“I don’t think you’ll see vacancy rates go past 5 percent,” Toft said.
Bisacquino called retail the other side of the story of industrial, with more people now shopping online.
Slower in-store sales are also a common theme in the Las Vegas area.
“It’s very well-reported that our consumers are not using shopping malls anymore and going on the internet,” said Brendan Keating, CEO of Logic Commercial Real Estate in Las Vegas.
Despite the negative press, the retail sector has been improving in Las Vegas, and Keating is forecasting a good year in 2017, though he said future outlooks is one of the hardest things to do.
“In general, it felt like a pretty healthy market in 2016 on investment sales and leasing,” Keating said.
Some assets in “good trade” areas in the valley were seeing improvements toward peak pricing and cap rates were also getting to levels prior to the recession, he added.
The office sector also has been on the mend in Las Vegas and will likely continue propelling upward.
“You’re going to see rental rates increase and concessions decrease,” said Michael Dunn, of Cushman &Wakefield’s commerce division in Las Vegas.
One of the deciding factors could be what happens in Washington.
With the recent elections, policies could shift many things around for the commercial real estate world. Bisacquino spoke about Dodd-Frank, tax codes and loopholes and the potential to raise more infrastructure in the U.S.