Kenny Sullivan, principal of Centra Properties, is shown Monday at the construction site of the Town Square regional mixed-use center. Photo by Craig L. Moran.

Architects for the Town Square regional lifestyle mixed-use center spent a lot of time designing each building in the 1.9 million-square-foot development at Las Vegas Boulevard and Sunset Road to look a little different than the others.

"We want it to be where you turn the corner and you see something new, something different," said Kenny Sullivan, principal of Las Vegas-based Centra Properties.

The first phase of Town Square, a joint venture between Centra and Turnberry Associates, is scheduled to open this fall with theaters, restaurants, shops and offices. Marnell Corrao is general contractor for the $750 million project.

It's part of the 7.4 million square feet of retail space under construction in Las Vegas in the fourth quarter, according to a market report from CB Richard Ellis. Vacancy rate is 3.7 percent on an inventory of 48.7 million square feet.

"New hotel rooms and gaming establishments will bring new jobs and employees to Southern Nevada," CB retail broker Zack Hussain said in the report. "This will be good news for a slow housing market and great news for retailers."

He said 1.6 million square feet of retail is being added on the Strip at projects such as Encore at Wynn, Palazzo, CityCenter and Echelon Place, making Las Vegas one of the top retail destinations for tourists.

Developers in Las Vegas have to get creative to maximize their investments in a time of high land prices, rising construction costs and increased competition. That's a driving force behind the recent trend toward mixed-use projects.

The best example of such development so far is The District at Green Valley Ranch. Other projects, such as Sullivan Square, Village at Centennial Hills, Paxton Walk and recently announced Promenada at Rainbow are on the way.

"The market remains strong," Centra's Jim Stuart said. "Neighborhood (retail) developers are taking a more cautionary look because of the slowdown in residential, but anything around the tourist district is among the most valued real estate in the world.

"What is a challenge for retailers is to give an experience that gets people to leave their computer terminal because online shopping has provided an ease and efficiency in the market that didn't exist before. I'm convinced my wife did not step into one store to do her Christmas shopping," he said.

Las Vegas research and advisory firm Applied Analysis reported 2.5 percent vacancy, unchanged from a year ago, on 44.3 million square feet of inventory in the fourth quarter. Average asking rents are $2.04 a square foot, up from $1.69 in fourth quarter 2005.

Net absorption for the quarter, or the amount of space taken by retailers, was 787,000 square feet, more than double the 368,000 square feet from the same period in the previous year. The market added 1.9 million square feet in 2006 and has 5.2 million square feet under construction.

Completions during the quarter included the first phase of Blue Diamond Crossing anchored by Target in the southwest valley and the first phase of Centennial Gateway, which has a Lane Home Furnishings store, developed by Territory Inc. in northwest Las Vegas.

Applied Analysis principal Jeremy Aguero keeps a close watch on population growth and spending patterns. Slower conditions exist for housing and in-migration, but the pace of decline appears to be slow and steady. Discretionary spending levels have "materially dropped" from record highs posted two years ago, he said.

As long as Las Vegas remains a popular destination to live, work, shop and play, the retail market will continue to flourish this year, Grubb & Ellis research analyst Dave Dworkin said.

While retail vacancy remained low and absorption was healthy in 2006, the market is not without its challenges, he said.

Time frames for retail development have been stretched, partly due to a massive backlog of commercial projects on the Strip. Land and construction costs are considered among the highest in the nation and projects such as MGM Mirage's $7 billion CityCenter will contribute to labor shortages for years ahead, Dworkin said.