The Las Vegas Valley anchored retail vacancy rate rose 0.5 points from 11.4 percent in Q4 2014 to 11.9 percent in Q1 2015. At the end of Q1, vacancy rates ranged from 9.3 percent in Power Centers to 12.7 percent in both Community and Neighborhood Centers. The first quarter makes two consecutive quarters with a rising vacancy rate. Still, this increase is not too troubling as the retail vacancy is still near the stabilized rate of 10 percent.
There were no completions in the first quarter of 2015; and the Valley’s total anchored retail space remained 44.3 million square feet.
Net absorption in Q1 was -253,600 square feet. This decline lowered year-over-year absorption to just 24,500 square feet. This large decline occurred when Food4Less vacated the market and made available several large neighborhood center anchor spaces. Community centers, on the other hand, experienced a small loss of -25,800 square feet of absorption, while power centers saw 65,400 square feet of net absorption.
Space under construction in Q1 remained at 278,700 square feet. Two projects comprise this space: Phase 2 of the Target Shopping Center at Decatur and U.S. 95 (140,000 square feet) in the northwest submarket and Phase 2 of Green Valley Crossing (138,700 square feet) at Green Valley Parkway and Horizon Ridge in Henderson, both of which are community centers. Work on these sites is intermittent, however, and progress is slow.
An outlook of the Reno/Sparks Q1 Retail market indicates increased leasing for various types of properties. There was activity with tenants looking for new space for either start up, new location, or multiple locations. Legends at Sparks signed leases with Dunkin Donuts and Menchlie’s Frozen Yogurt. Wireless phone service provider Metro PCS executed two new leases with Coliseum Meadows and University Village. Just Smiles Dentistry signed a lease to expand at University Village. Styles for Less and Peloton Bicycles signed new leases at Ridgeview. A sushi restaurant signed a new lease at Canyon Center. Overall, transactions of retail properties in Northern Nevada continue to increase.
The market currently has an overall vacancy of 12.1 percent. Shopping centers are at a 14.5 percent vacancy, power center vacancy is at 19 percent and general retail freestanding vacancy is lowest at 8.5 percent. Current lease rates range from $1.10 to $2.50, triple net.
Although the improvement of the retail market may appear to be slow developing, the uptick in retail property transactions in Northern Nevada is an encouraging sign. Projections indicate there will be more interest from national and regional retailers to establish a location in the Reno area.
Southern Nevada analysis and statistics compiled by RCG Economics, Northern Nevada analysis provided by Dickson Commercial Group,