Southern Nevada
The Las Vegas Valley retail market started 2017 with a small rise in the vacancy rate – 0.3 points from 10.5 percent in Q4, 2016 to 10.8 percent in Q1, 2017. At this point, the Valley’s retail market is generally stabilized. However, this “stabilized” state, just below the surface, remains in flux. The Las Vegas Valley retail market started 2017 with a small rise in the vacancy rate – 0.3 points from 10.5 percent in Q4, 2016 to 10.8 percent in Q1, 2017. At this point, the Valley’s retail market is generally stabilized. However, this “stabilized” state, just below the surface, remains in flux.
The northeast submarket is maintaining a healthy 6.1 percent vacancy rate while downtown is lagging behind with a vacancy rate of 22.3 percent. At the end of Q1 vacancy rates, by product-type, were 7.1 percent in power centers, 12.4 percent in community centers and 11.3 percent in neighborhood centers.
Net absorption in Q1 of approximately -110,800 square feet wiped away some of the gains in Q4. However, the year-over-year total remained positive at 297,136 square feet. Power centers accounted for most of the positive demand while neighborhood centers made up the rest.
Development in the retail market has generally been picking up. Space under construction is now at 239,000 squre feet with planned space at 946,493 square feet.
Even with new product planned for the market, online retailers and their distribution centers continue to thrive at the expense of retail.
This trend has been particularly impactful on community centers. Still, even in the wake of this new retailing paradigm, certain shopping centers in certain submarkets continue to perform decently.
Northern Nevada
Northern Nevada’s retail climate in Q1 was full of unexpected announcements and lease transactions. However, the overall vacancy rate made little progress, dropping 1 percent over the last 12 months to 9 percent at the end of the first quarter. Retail net absorption was the lowest it has been over the past five quarters. Northern Nevada’s retail climate in Q1 was full of unexpected announcements and lease transactions. However, the overall vacancy rate made little progress, dropping 1 percent over the last 12 months to 9 percent at the end of the first quarter. Retail net absorption was the lowest it has been over the past five quarters.
The most actively leased market sector is general retail, which includes freestanding, single tenant properties and a vacancy rate of 5.5 percent. Shopping Centers follow behind with 11.1 percent vacancy and power centers at 15.2 percent. The average asking rate delta between vacancies in existing centers and newer construction is drastic and can range anywhere between $0.95 per square foot to $2.30+ per square foot. New construction rates remain high an indication of the overall health of the retail market.
No new construction was completed in 2017’s first quarter, however, over 106,650 square feet of new retail space is under construction, mainly at the South Meadows Promenade (78,000 sq.ft.).
With the push for redevelopment in previously, undesirable neighborhoods and the expansion of international retailers moving into urban and suburban submarkets, the overall retail market in Reno/Sparks is in a major upswing. While Reno/Sparks continues to see tremendous growth, the effects of our improving economy disperse to the surrounding cities.
Southern Nevada analysis and statistics compiled by RCG Economics, Northern Nevada analysis and statistics compiled by Dickson Commercial Group.
