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LAS VEGAS RETAIL
There was no shortage of demand among the
Las Vegas Valley's commercial markets during the
first quarter 2006 — the problem is in some cases there's not enough supply.
The retail market is one of the biggest area
where the lack of supply has come up, Few retail centers were completed during
the first quarter, and only 500,000 square feet were brought to the market.
The handful of centers completed during the
first part of 2006 included a Lowe's anchored center at the northwest corner of
Craig Road and Jones Boulevard, and an 86,000-square-foot center, the Cheyenne
Marketplace, in North Las Vegas but there are more on the drawing board.
The retail vacancy rate has dropped to around
3.9 percent, which is too low to be healthy for the market in the long term.
With 5 million square feet of retail space under construction and another 3.3
million square feet of space planned will help with the imbalanced market but
the lack of product and the continuing increase in
demand will impact the market
for the near future.
The overall retail market vacancy rate of 3.9% in the fourth quarter of 2005 has
remained at some of the lowest rates in years. Low vacancies means lease rates
are rising while the population continues its dynamic growth pattern, and
developers routinely achieve 100% pre-leasing. There is no shortage of demand in
the valley.
The overall average lease rates for retail product rose to $1.71 in the
fourth quarter. As a result of strong demand and overwhelming growth, the
Henderson submarket recorded the highest average lease rates at $2.60. The
Central West submarket had the lowest average lease rates at $1.26. As
higher-end retail centers are built, rates are likely to increase across the
valley.
As the Las Vegas economy and population continue to grow, and unemployment
numbers remain low, demand will increase and vacancy will continue to post very
low numbers. The Las Vegas retail market will continue to mature,
attracting high-end national and global retailers.
While cap
rates are low compared to 5 years ago ranging from 4% to 7% - low vacancy, high
demand and increasing rents insure your investment should have a good upside to
it during your hold period.
Prime Source Commercial works with
investors interested in acquiring retail centers for investment, companies
wanting to locate or establish a retail presence and small business owners and
tenants wanting to own or lease retail space. No matter what your needs
are, we can help!
Contact
Terry Barone
I will be happy to assist you!
(702) 682-5202
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