The fourth quarter posted the highest dollar volume by almost two times for the year with $87.14 million in sales volume over 22 transactions. Both were highs for the 2019 quarter by quarter. The most notable sale was the 10 building Sparks Galleria disposition, which accounted for roughly half of the quarter’s volume.
The largest leasing transaction this quarter was for the SPCA. They leased 18,347 SF at 75 East Moana Lane, previously occupied by Nevada Backyard. This was the only retail lease transaction this quarter, in Reno, over 10,000 SF.
Last year had a total of five retail lease transactions over 15,000 SF. There are more than 20 retail spaces, over 15,000 SF, currently on the market available for lease. There were some larger tenants that closed on a retail location this year. Best Buy closed at The Legends at Sparks Marina. Goodwill relocated from The Crossing at Meadowood Square to Smithridge Center (previous Toys R Us). The Virginia Street Antique Mall closed its doors this year, vacating 17,600 SF in Midtown.
The largest retail lease transaction of 2019 was for Action Home Appliance, leasing 25,128 SF in the third quarter. They joined Ross, Planet Fitness and many more with the Silver State Plaza Shopping Center at 500 N. McCarran Blvd., Sparks.
Retail vacancy, including sublease, increased 10 basis points from last year and from one year ago, up to 7.5 percent for the fourth quarter of 2019. This year marked the eighth straight year of retail occupancy gains. Tenants have absorbed almost 6.4 million square feet during this time – an average of 800,000 square feet per year. Over the same time period, retail vacancy has dropped. Occupancy grew by 68,600 square feet this quarter.
The Las Vegas retail market delivered 595,700 square feet in 2019 –the most since 2009 and a 124 percent increase year-over-year. Strip centers (420,200 square feet) accounted for 71 percent of all retail properties delivered in 2019, while neighborhood & community centers represented 20 percent of 2019 deliveries.
The Las Vegas retail market recorded nearly $1.4 billion in sales volume in 2019, a 20 percent decrease compared to 2018. The average cap rate for retail properties this quarter was 6.6 percent, down 10 basis points since this time last year. Private investors (94 percent) accounted for nearly all buyers in 2019, followed by institutional buyers at 3 percent.
As the Las Vegas economy continues growth, the retail market benefits. The Las Vegas economy relies on consumer spending and tourism, which will continue to be fueled by an influx of new residents and visitors. Lack of available land and rising development costs will continue to be a thorn in the otherwise buoyant retail market.