The Las Vegas multifamily market is on course to see an increase in rents in 2016, potentially reaching the highest level on record for the city, according to a second-quarter report from California-based Marcus &Millichap.
Strong growth in employment and falling vacancy rates in Las Vegas, along with a “broad and motivated pool of renters” were some of the reasons given for a forecast increase of 4.6 percent in rents in 2016 — equating to an anticipated average of $866 on a per month basis, according to the report.
That number also adds onto an 8 percent rise in average rental rates over the past four quarters to $844 per month, the report stated.
Two submarkets exceeded the norm in the second quarter report. The southwest part of town saw average rental rates of $1,064, a double-digit increase from a year ago. The Lakes/Summerlin area also exceeded a $1,000 per month average in the second quarter, recording a 6.9 percent climb from a year ago.
Vacancy rates in the multifamily market in Las Vegas have dipped 60 basis points over the past four quarters to 6 percent in March, with absorption of one-room studio spaces driving the decline. Those numbers follow a contraction in vacancy rates by 150 basis points during the same period in 2015, according to the report.
The city’s tightest submarkets for vacancy in the second quarter were in the south part of town at 4.1 percent, with the west side coming in second. Sunrise Manor on the east side held the highest vacancy rate at 8.4 percent.
Marcus and Millichap’s forecast on vacancy rates for the city contains an anticipated decline of 10 basis points to 5.1 percent in 2016, with an estimated net absorption of 2,450 units.
The development pipeline was expected to follow along with 2015’s production cycle in the report. In 2015, 2,600 units were brought to the market, the strongest annual growth since 2010. In 2016, developers will complete 2,350 units, according to the report.
Restaurant Row expands
Equity Office Properties, owner of The Hughes Center campus and an affiliate of The Blackstone Group, is adding onto its Restaurant Row asset at Flamingo Road and Howard Hughes Parkway.
The 14,160-square-foot building is set to be completed in the fall of 2016, with a tenant grand opening planned for the first quarter of 2017.
Seven tenant spaces ranging from about 1,300 to over 4,000 square feet are available in the structure that CBRE is actively leasing for. There are currently two committed tenants: Bandito Latin Kitchen &Cantina and H2O Sushi &Izakava, both of which will occupy 60 percent of the development. CBRE is actively leasing the planned project.
“We designed a restaurant environment to serve the tenants of The Hughes Center and their 4,000 employees while capitalizing on more than 100,000 cars per day that drive by the area,” said Matt Bear, CBRE vice president of brokerage services and retail investments. “Given the proximity to the Las Vegas Strip, the Las Vegas Convention Center, UNLV and McCarran International Airport, this location is ideal for a variety of unique dining experiences.”
Realty Executives of Nevada merges with Utah-based company
Realty Executives of Nevada recently merged with St. George, Utah-based ERA Brokers Consolidated, a real estate company that works in the commercial, residential and property management realms. The merger also marks ERA’s entrance into the local region.
“This transaction creates a complementary dynamic that will excite our independent sales associates and clients equally,” said Jeff Moore, former broker/owner of Realty Executives Nevada. “Las Vegas is an international city, and we are now connected to an international brand widely known around the world.”
The newly formed entity will do business under the name ERA Brokers Consolidated and be comprised of 11 offices throughout Idaho, Arizona, Nevada and Utah with more than 300 agents and staff. The number also includes the addition of the five former Realty Executives of Nevada locations spread throughout parts of the valley including Henderson, Summerlin and downtown.
Molasky completes FBI building
Las Vegas-based The Molasky Group of Companies recently announced the completion of a renovation and addition project at the headquarters of the Milwaukee, Wisconsin, division of the FBI.
“It is a privilege and honor to provide the FBI Milwaukee Division with a state-of-the-art facility built for its specialized mission,” said Matt Connolly, senior vice president of development for the Molasky Group.
The $45 million project, which started in 2104, included a major renovation of an existing 65,000 rentable square feet and an addition of 18,000 rentable square feet, along with adding a covered parking facility and federal security upgrades. The new 83,000-rentable-square-foot building contains four stories of Class A office space and is the fifth divisional field office that Molasky has completed for the FBI.