Investment activity slowed slightly in Q3, with over $34 million in volume over 19 transactions, down from $55 million in Q2. The quarter simply lacked any major shopping center deals, as most were pushed into the early part of Q4.
The largest leasing transaction this quarter was for Action Home Appliance & TVs. They joined Ross, Planet Fitness, CVS and many more within the Silver State Plaza Shopping Center at 500 N. McCarran Blvd., Sparks. This will be their first location in northern Nevada. They have locations in Las Vegas, as well as two locations in California.
Action Home Appliance took over a space that was previously occupied by Fallas, at 25,128 SF. The second largest lease transaction this quarter was for Lee’s Discount Liquor at 23,729 SF. Lee’s Discount Liquor opened their first Reno location this year at 2950 Northtowne Lane. They purchased a building previously occupied by Ross Dress For Less, who relocated to a nearby shopping center. The third-largest lease transaction was Image Studios 360. The 7,915 SF free standing retail building was previously occupied by Marinello Schools of Beauty.
The remaining lease transactions this quarter were all under 8,000 SF. The retail leasing market is currently steady and should remain so through the end of 2019.
In Q3, the Las Vegas employment market continued to record job growth and the commercial real estate market is as strong as ever as we head into 2020. At the close of Q3, the overall retail vacancy, including subleases, increased 30 basis points from the last quarter, yet decreased 80 basis points from a year ago to 7.4 percent. New development peaked in 2019 with 523,000 SF having been delivered over the previous nine months, the most since 2009. There are currently 26 centers totaling 422,000 SF under construction with all except three planned to be completed by the end of 2019.
Average asking rent for all centers grew an impressive 10.1 percent year-over-year. Neighborhood, community centers and strip centers experienced the highest rent growth year-over-year, followed by lifestyle centers. Demand for neighborhood and community centers has been strong as evidenced by 463,000 SF of occupancy growth year-to-date, the most compared to other center types.
Demand for retail properties has been strong despite the growing eCommerce trend. In Q3, $256 million traded in the Las Vegas retail market compared to $186 million in Q3 2018. Sales activity at the close of Q3 totaled 760 million compared to $545 million at the same time last year. The average price per SF increased by 17.7 percent to $233 PSF in Q3 compared to $198 PSF a year ago. The current and forecasted growth in southern Nevada along with favorable rates of return in comparison to other regional markets have been the key drivers of retail investment.