In this economy, the two question most retailers ask are:
The Vegas retail market is still struggling. The Las Vegas retail market, like many metropolitian markets, shows the strain of the current economic downturn with steadily increasing vacancies. According to the National Retail Federation expect consumer spending to continue to lag behind overall growth, as households continue to pay down debt levels. Housing and credit are important drivers of retail sales. Retail sales in November and December 2009 holiday season were at the high end of conservative expectations. It appears we may be at or nearing the bottom of this lenghty recession, already one of the longest of the eleven downturns since WW2. It is expected that as consumer confidence builds retail sales will rebound beginning in 2010.
The investment market continues to suffer due to lack of debt capital. Wary investors are watching the retail market for signs of more weakness and reluctant to act until assured they are near or at the bottom of the market and until prices fall further. Lenders too are hesitant to lend on properties unless they have solid tenants and low vacancies. The tolerance for risk by all is very low.
2010 should be a break out year. The National Retail Federation expects "positive signs" from the housing market and employment levels in 2010 to strengthen consumer confidence throughout the year. As overall sentiment begins to lift the 18 months of pent up consumer demand, it will be a challenge for retailers who still have lean inventories and did not gear up in advance of the upcoming surge.
The present retail market is not a downer for everyone. There are some bright spots for investors with cash looking for good opportunities, business able to expand and new tenants looking to lease space. For tenants looking for retail space in Las Vegas, there are more location choices, better rates, free rent and more negotiating power for tenants. The current market provides businesses the opportunity to expand or downsize by taking advantage of exceptional deals in both leasing and sales by motivated landlords and sellers.
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 understand this market and can help!