Retail is rising, the office sector has improved and the industrial market is on track for its best year in nearly a decade.
That’s the word from the local offices of brokerage Colliers International, whose second-quarter report showed marked gains among all commercial real estate submarkets.
Consider retail, which had its vacancy rate fall to 9.1 percent, down from 9.5 percent in the first quarter, driven by a statewide industry job gain of 5,800 positions year over year in April. The pace of investment sales was white-hot in the first half of the year, with sales of 15 centers totaling 732,844 square feet and more than $94 million in sales volume, the Colliers report said.
What’s more, preleases are strong in projects under construction, so net absorption should stay positive through the rest of the year. Redevelopment of older projects will also help the market.
The office market made big strides in leasing up, with more than 440,000 square feet of net absorption in the second quarter. The vacancy rate dropped for the fourth straight quarter, falling to 19.8 percent. Distress in the sector eased too, as the share of office properties in some stage of foreclosure fell by 175,000 square feet.
Colliers forecasts nearly 300,000 square feet of new space through the second half of 2014. But large, speculative projects scheduled to wrap in the first half of 2015, including The Gramercy and One Summerlin, could push vacancy rates back up.
But perhaps the market’s brightest spot was the industrial sector, where the second-quarter vacancy rate plummeted to 10.1 percent from 12.8 percent a year earlier. Net absorption weighed in at 1.4 million square feet, up from 1.2 million square feet a year ago.
Net absorption has been positive for eight of the last nine quarters, and the average asking rent was at 53 cents per square foot, up three cents from the second quarter of 2013.
The Colliers report credited job growth with some of the improvement. Employment sectors associated with industrial buildings added 4,970 jobs year over year in April. And those trends are set to continue through year’s end.
“All in all, 2014 looks as though it will be the best year for Southern Nevada’s industrial market since 2007,” said John Stater, Colliers’ research director.
■ Speaking of commercial real estate reports, get ready for a new player in the local market.
Missouri-based research firm Xceligent has partnered with the Commercial Alliance of Las Vegas to form industry advisory boards that will review real estate performance on quarterly and annual bases.
Metrics tracked will include vacancy, absorption and rents.
Hayim Mizrachi, CCIM, the alliance’s president and a principal in brokerage MDL Group, said the advisory boards will help produce uniform market information.
“The major reports published here each use a different methodology, so you don’t really get one consistent report that has been vetted by researchers with input from brokers,” Mizrachi said. “Xceligent is organizing the brokers who are involved in the deals to find out what really happened. The information produced is more complete.”
Regional Vice President Steven Golin said the agreement is a “significant step in helping Xceligent and Las Vegas develop the most accurate, complete and focused database of commercial real estate information in the area.”
Xceligent’s advisory boards include nearly 30 local commercial brokers.
Office brokers are: Randy Broadhead, SIOR, and Bruce Follmer of CBRE; Ryan Martin, CCIM, SIOR, and Stacy Scheer, CCIM, of Colliers International; Michael Dunn, CCIM, SIOR, of Commerce Real Estate Solutions; Bobbi Miracle, CCIM, and Soozi Jones Walker, CCIM, SIOR, of Commercial Executives; Rob Lujan of Gatski Commercial; Dean Kaufman of Jones Lang LaSalle; Charles Van Geel of American Nevada Corporation; Cathy Jones, CPA, CCIM of Sun Commercial; and Jayne Cayton of Voit Commercial.
Industrial brokers are: Donna Alderson, SIOR, of CBRE; Dan Doherty, SIOR, Susan Borst, CCIM, Spencer Pinter and Suzette LaGrange, of Colliers International; Art Farmanelli, SIOR, of Commerce Real Estate Solutions; Xavier Wasiak, SIOR, of Jones Lang LaSalle; Jason Simon of Gatski Commercial; and Jarrad Katz, CCIM, of MDL Group.
The retail panel will include: Penny Mendlovic of CBRE; Scot Marker of Colliers International; Brenden Keating of The Equity Group; Nelson Tresslor of Newmark Grubb Knight Frank; Brian Sorrentino, CCIM, of ROI Commercial Real Estate; Lisa Callahan, CCIM, of Sage Commercial Advisors; and Dan Hubbard of Commerce Real Estate Solutions.
Mizrachi said participates were selected by their peers.
The Commercial Alliance of Las Vegas is the commercial real estate arm of the Greater Las Vegas Association of Realtors.
Contact reporter Jennifer Robison at email@example.com. Follow @J_Robison1 on Twitter.