Retail vacancy in Las Vegas Valley rose to 10.8 percent in the third quarter as retailers such as Borders book stores closed their doors, the Applied Analysis business advisory firm reported.
The market saw 223,000 square feet of negative absorption, which means more space was vacated than was leased during the quarter. About 100,000 square feet was sourced to the closing of four Borders stores in the valley.
Vacancy rose from 10.4 percent in the second quarter and from 10.7 percent a year ago.
The rate has remained above 10 percent for more than two years and is not likely to improve significantly in the near term, said Jake Joyce, project manager of Applied Analysis.
Borders in particular had stores in prime power centers that have been outperforming the broader market in terms of higher lease rates, Joyce said Tuesday. That space will probably be backfilled quickly as the ability to enter those power centers has been limited, he said.
"Book stores are not the most profitable business to be in," Joyce said. "It's not necessarily a byproduct of the local economy as much as a move by a national retailer."
Average asking rents have been declining since the economic downturn started more than three years ago. Rents fell to $1.52 a square foot per month, down 5 percent from $1.60 a year ago.
While the retail sector continues to feel the effects of the recession and cautious consumer spending, some companies are moving forward on new construction. WinCo Foods is building one store at Stephanie Street and Wigwam Parkway in Henderson and a second store at Decatur Boulevard and the northern Beltway in North Las Vegas. A second phase of the Target-anchored Green Valley Crossing will include Petco and Staples.
Fry's Electronics purchased the former Great Indoors store at Boca Park, which should spark a bit of confidence as retailers position themselves for opportunity, Joyce said.
Retail-using employment increased by 1.5 percent, or 2,500 positions, in August from a year ago, Applied Analysis reported.
Plans for about 4 million square feet of new retail space, primarily stalled projects and future phases, remain in the works. That includes 1.4 million square feet of development that was stopped or delayed during the downturn.
Colliers International brokerage in Las Vegas showed third-quarter retail vacancy at 11.9 percent, unchanged from the previous quarter and up from 10.7 percent a year ago.
"In general, it seems as though the retail market is holding steady and we don't expect any major moves for the next 12 months, other than the completion of five new anchor spaces in Henderson and the northwest," said John Stater, director of research for Colliers.
While the lease or sale of big-box retail space will have the largest immediate effect on the market, the struggle to fill 1,130 empty stores defines the difficulties facing local retail property owners, he said.
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