In the third quarter of 2014, the Las Vegas retail market reported a vacancy rate of 9.1 percent. The latest period represents a decline of 0.1 percentage point compared to the prior quarter (Q2 2014). Compared to a year ago (Q3 2013), the retail vacancy rate has declined 0.3 percentage points. Anchored retail space has now reported annual declines in vacancy rate for nine consecutive quarters.
During the quarter, the 200,000-square-foot Sahara Center completed construction, bringing total market inventory to 52.6 million square feet. The neighborhood center was partially pre-leased when completed. In the past three quarters, three retail projects totaling 241,000 square feet have completed construction.
The retail market reported approximately 224,700 square feet of positive net absorption during the third quarter. Selected transactions included the leasing of 17,000 square feet in Town Square to Vercini. In addition, Dollar Tree signed a deal for more than 12,000 square feet, while Ulta leased nearly 11,000 square feet. In the past year, the retail market has reported nearly 389,800 square feet of net move-ins.
By the end of the third quarter, six anchored retail projects totaling 2.1 million square feet were under construction throughout the valley. A number of projects continued to make progress, including the second phase of Tivoli Village at Queensridge and Downtown Summerlin which opened in October. In addition, roughly 11,300 square feet of pad space broke ground at Green Valley Crossing, while Urgent Care Extra is building a 4,000-square-foot facility.
The Reno/Sparks retail market conditions experienced some slowdown during the third quarter of 2014. During the quarter, the vacancy rate increased slightly, and the area had a negative net absorption of 37,411 square feet. With this quarter’s negative net absorption, the market had positive net absorption in five of the last eight 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 third quarter, there were 17 businesses moving into shopping centers consisting of 53,221 square feet while during the same period, 16 businesses moved out consisting of 101,426 square feet. Scolari’s was the largest tenant moving out of space, vacating 50,528 square feet. During the quarter, several new tenants opened including Hancock Fabrics, Yellow House Furniture and Invictus Computer Games.
The line shop vacancy rate has decreased to 20.75 percent this quarter from 21.52 percent last quarter. The anchor vacancy rate has increased to 13.96 percent this quarter from 13.09 percent last quarter. This is the highest anchor vacancy rate since the first quarter of 2013. The overall vacancy rate is 16.76 percent, which remains low compared to 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.