The Las Vegas retail vacancy rate fell below 10 percent or the first time since 2008 as it ended 2013 at 9.2 percent. The latest rate is down 0.2 percentage points from the prior quarter and represents a decline of 0.8 percentage points from the prior year.
During the fourth quarter, the retail sector reported positive net absorption with 147,900 square feet of net move-ins. For the year, approximately 483,100 square feet of positive net absorption was reported. During the final quarter, Planet Fitness leased 35,100 square feet in a neighborhood center and another 15,100 square feet in the Arroyo Market Square power center. In addition, Colleen’s Classic Consignment leased 35,000 square feet, while Dollar Tree leased 12,000 square feet. In addition, roughly 12,900 square feet of pre-leased space was completed during the fourth quarter, approximately 7,000 square feet was sourced to the new Fleming’s and the remaining 5,900 square feet was comprised of a pre-leased multi-tenant pad.
Approximately two million square feet of anchored retail space remained actively under construction at the end of the year, which is the highest level of development activity reported since the first quarter of 2009.
The growth in consumer spending appears to be having a positive impact on demand for anchored retail space. During the year, substantial growth was reported by a number of sectors. The largest sector, food services and drinking places, posted a respectable year-over-year growth rate of 4.3 percent.
The Reno/Sparks retail market conditions improved during the fourth quarter of 2013. During the quarter, the vacancy rate decreased slightly and the area had a slight positive net absorption of 2,985 square feet. With this net absorption, the market had positive net absorption in three of the last five quarters. Looking at the last few quarters, it appears that the market vacancy peaked in the secound quarter of 2012.
During the quarter, there were 23 businesses moving into shopping centers consisting of 74,406 square feet. During that same period, 18 businesses moved out consisting of 75,221 square feet. JC Penney Furniture was the largest tenant moving out-of-space, vacating 50,915 square feet. During the quarter, several new tenants opened, including VF Outlet and Famous Footwear in the Legends and a McDonald’s in the Eagle Landing Shopping Center.
The line shop vacancy rate has decreased to 22.80 percent this quarter from 23.46 percent last quarter. The anchor vacancy rate increased slightly to 13.79 percent. This is near the lowest anchor vacancy quarter rate since the third quarter in 2010. The overall vacancy rate is 17.45 percent, which is noticeably lower compared to the record high from a little over a year ago of 18.84 percent.
As the market stabilizes and the vacancy rates continue to decrease, it is incrementally taking a little pressure off of landlords. However, with a continuation of high vacancy rates in the market, it remains a good market for tenants to find deals.