The industrial sector continues to lead the pack in Las Vegas’ commercial real estate market. But office and retail are both on a positive path, according to two fourth quarter reports: one by Colliers International and the other produced by CBRE.
Industrial posted 4.9 million square feet of positive net absorption, according to CBRE. This number is a record level for the Las Vegas market. Also, new construction of industrial space last year was the highest since 2008 with 2.8 million square feet of new product brought online. CBRE put vacancy at just above 5 percent; Colliers’ number was 5.5 percent.
The office market saw the 16th consecutive quarter with positive absorption. The total absorption for the year was just over 900,000 square feet, according to CBRE. The west valley was the hottest submarket, accounting for 40 percent of that number. The southeast came in second.
Vacancy remains just above 19.5 percent, though it was 167 base points lower than the fourth quarter of 2014. Many areas around town were above the vacancy average, including the central east submarket at 27.64 percent and the northwest at 26.32 percent vacancy.
Colliers is expecting the same types of gains in the office market in 2016 as there were in 2015. According to the report, the market should expect minor setbacks and overall positive performance with vacancy falling to 16 percent by the end of the year. If the healthy market continues, asking rents could hit $2.05 per square foot by the end of 2016.
Retail has been on the move with the lowest vacancy rates since 2008, according to CBRE. Last quarter hit 9.8 percent vacancy.
According to Colliers, the retail market is in its second phase of recovery since the end of the recession. Last year brought 4.2 million square feet of net absorption. Colliers agrees the vacancy rate has dropped significantly since 2014. But the number remains high. Colliers is pointing to many possible reasons including general trends of creating smaller footprints and more online sales.
Colliers said there is also some concern over employment growth in the sector, which is usually on the rise at the end of the year with temporary growth in the sector. Again, Colliers pointed to Internet and online retail as the reason for the impact.
The multifamily sector saw strong gains in amount of product, which Colliers said might cause vacancy rates to go up temporarily in the short term. But the long-term picture sees the rise in home prices keeping people, especially millennials, in multifamily housing.
Residential and nonresidential construction figures for Clark County are on the rise over 2015 figures, according to a recent report.
Dodge Data & Analytics’ December report on 2015’s construction starts for Clark County showed positive gains over 2014.
The year-to-date analysis showed double-digit gains for the residential and nonresidential sectors. In nonresidential, construction starts were over 1.7 billion square feet with a 17 percent gain. The residential market came out with even stronger gains — landing over 1.9 billion with a gain of 24 percent. The total gains year over year in both sectors hit 21 percent.
Dodge Data & Analytics serves the North American construction industry, providing data, analytics, news and intelligence.
Berkshire Hathaway relocates
Berkshire Hathaway HomeServices Nevada Properties recently relocated its southwest branch office to 8850 W. Sunset Road, Suite 200. The 15,500-square-foot space houses almost 250 real estate sales executives, along with several new technologies.
“This is the most modern and technologically advanced office space we have ever had and is designed to help a new generation of real estate sales executives work efficiently and collaboratively,” said Gordon Miles, president and COO of Berkshire Hathaway HomeServices Nevada Properties. “With open workspaces that all have USB ports and wireless printing and copying capabilities, our agents can bring their preferred devices and work in a way that is most comfortable and productive for them.”
According to company officials, the new office’s design space is attuned to millennials.
“This office is the future of the real estate industry,” said Aldo Martinez, branch manager and managing broker or the southwest office. “It supports the fastest growing segment of real estate, the millennials, who largely prefer to work with their own technology in open spaces tailored for agent collaboration and synergy. The office lends itself to a united working environment where socialization is encouraged to foster growth.”