The Las Vegas retail vacancy rate reported a slight increase in the second quarter of 2014. The rate rose 0.1 percentage point compared to the prior period (Q1 2014) to 9.1 percent. However, compared to a year ago, the retail vacancy rate remains down 0.7 percentage points. Since the high of 11.1 percent reached in the third quarter of 2010, vacancies have declined 2.0 percentage points.
One anchored retail project completed construction during the second quarter of 2014, bringing total inventory to 52.2 million square feet. Sprouts Farmers Market opened its 25,000-square-foot location at Green Valley Crossing. In the past year, 68,800 square feet of anchored retail space has been added to the market, which represents little change from the 62,200 square feet of completions reported in the prior 12-month period.
After reporting positive net absorption for four consecutive quarters, the retail sector witnessed 17,600 square feet of net move-outs in the second quarter of 2014. Despite reporting negative net absorption in the latest period, the retail sector has witnessed 429,100 square feet of net move-ins in the past year.
Roughly 2.1 million square feet of anchored retail projects remained actively under construction by the end of the period. Las Vegas Athletic Club continues to make progress on its 87,800-square-foot facility located in North Las Vegas, the 200,000-square-foot Sahara Center is well underway and the 300,000-square-foot second phase of Tivoli Village at Queensridge continues to move forward. Downtown Summerlin is expected to reach completion this fall, adding 1.5 million square feet to the market.
The Reno/Sparks retail market conditions continued improving during the second quarter of 2014. During the quarter, the vacancy rate decreased slightly, and the area had a positive net absorption of 109,604 square feet. With this net absorption, the market had positive net absorption in five of the last seven quarters. Looking at the last several quarters, it appears that the market vacancy peaked in the second quarter of 2012 and has been generally improving since then.
During the quarter, there were 48 businesses moving into shopping centers consisting of 247,843 square feet. During the same period, 41 businesses moved out consisting of 130,074 square feet. Sac N Save on Plumb was the largest tenant moving out of space, vacating 44,062 square feet. During the quarter, several new tenants opened including Floor and Décor in Firecreek Crossing, Hobby Lobby along South Virginia Street and Consign Furniture in the Sierra Town Center.
The anchor vacancy rate has decreased to 13.09 percent this quarter from 13.78 percent last quarter. This is the lowest anchor vacancy rate since the third quarter of 2010. The overall vacancy rate is 16.57 percent, which is noticeably lower than the record high from almost two years 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.