Retail had a strong start to the year in Q1 with $40,203,740 in total sales volume and 19 total sales. The average price per square foot in the first quarter was $347.20 with two sales over $1,000 per square foot. No neighborhood centers traded hands in the first quarter.
The market has limited inventory and single tenant net leased deals priced under $5 million are still seeing strong buyer interest. The buyer demand for well-priced product with credit-worthy tenants remains very high.
Reno’s retail leasing market has remained steady from 2020, with an overall vacancy rate of 6.2 percent. Retail vacancies are anticipated to remain relatively stable. Brokers at Dickson Commercial are seeing a trend of new retailers coming into the market, including Five Below, a Philadelphia-headquartered discount store. Five Below has leased 10,542 square feet within Del Monte Plaza, joining Whole Foods, Sierra Trading Post, Qdoba and many others.
The largest lease transaction this quarter is Grocery Outlet in Carson City. They leased 18,000 SF within the Plaza 50 Shopping Center, joining 99 Cents Only, Metro PCS, Flat Earth Pizza and Dunkin Donuts.
The first quarter of 2021 showed positive signals for retail in southern Nevada. Casinos reopened after months of closures and, as a result, tourism began to return to Las Vegas, boosting retailers.
Likely a result of the pandemic and market trends, retail construction in the Las Vegas Valley is below the historical average. Only 311,000 square feet was under construction this quarter. New supply, along with weakened demand will likely increase vacancies in the short term. The third and fourth quarters of last year did show increased demand which helped keep vacancies somewhat stable around 6.4 percent. In Q1, 2021, retail vacancy only increased slightly to 7.1 percent. As sales volume dropped below $1 billion for the first time in 13 years, 2020 also posted a decrease in investment volume by almost 50 percent. In Q1 asking lease rates averaged at $1.51 per square foot (NNN), an increase of only $0.01 per square foot from the previous quarter. Significant leases included 20,100 square feet to Planet Fitness on W. Charleston at $1.38 per square foot (NNN) and 10,659 square feet at 4360 E. Craig for $0.75 per square foot (NNN).
The southern Nevada retail market came out of 2020 in a better-than-expected position. While not quite where it should be, with tourism returning and businesses reopening, signs indicate the market will continue to improve throughout the year.