Analyst sees progress for valley’s retail market

With real estate prices down and sales of ski and snowboard equipment rising, Randy McGhie figured the timing was right to expand his business to a second location in the Las Vegas Valley.

McGhie recently signed a lease for 12,000 square feet of retail space at Stephanie Beltway Plaza in Henderson and plans to open his ski, snowboard and bicycle shop in April or May. He’s investing about $500,000 in the store, which already has signs in place.

“We are definitely seeing positive absorption in the local retail market and strong rents for good real estate,” said Todd Manning, a Commerce Real Estate Solutions retail adviser who represented McGhie in the lease transaction.

Retail vacancy for 51.7 million square feet of inventory was 9.9 percent at the end of 2012, down from 10.6 percent in 2011 and the lowest level since the first quarter of 2009, Las Vegas-based research firm Applied Analysis reported.

In 2012, the retail sector had three quarters of positive net absorption, or more space being occupied than vacated, including 188,700 square feet of net move-ins in the fourth quarter.

Notable transactions during the quarter included Open Box Buy taking 34,800 square feet formerly occupied by Linens ’N Things in Rainbow Promenade and Goodwill leasing 24,000 square feet in Regency Plaza. Also last year, Galaxy Theaters signed a lease for 40,700 square feet at Green Valley Town Center II and Ross Dress for Less now occupies the 25,000-square-foot former Borders bookstore at Canyon Pointe.

The latest market activity suggests the retail sector is moving in a positive direction, Applied Analysis principal Brian Gordon said.

“With more retailers expanding or relocating to the area, a number of vacant big-box spaces are experiencing increased interest,” he said. “While demand for some of these larger units has been positive, they have generally been tied to discount retailers.”

Pricing adjustments on the part of landlords allowed for some of the recent movement, Gordon said. Average asking rent in the fourth quarter was $1.50 per square foot, compared with $1.44 per square foot in the third quarter and $1.51 per square foot in the year-earlier period.

Although the valley’s anchored retail market is showing signs of stabilization, it’s “still a bit wobbly,” RCG Economics principal John Restrepo said. He reported 12 percent vacancy in the fourth quarter and 219,000 square feet of net absorption.

Taxable retail sales are improving, but continued weakness in the valley’s job and housing markets raises questions about the sustainability of any improvement, Restrepo said.

Retail construction activity has been limited to the 300,000-square-foot second phase at Tivoli Village and a 4,000-square-foot addition to WinCo Foods at Wigwam Parkway and Stephanie Street.

HOUSING TURNAROUND

Frank Nason of Residential Resources said the housing market “flip-flops” from a buyer’s market to a seller’s market about every 12 months or so.

“A year ago, I would have killed to have the buyer clients I have today,” the real estate agent said. “Today, not so much.”

Even short-sellers, or people seeking a lender-approved sale for less than the mortgage balance, are good clients today since the process is truncated and multiple offers come within days, Nason said.

“So even if you have to suffer through the short-sale process, at least you don’t have to suffer through the sales process where you have to weed through the unqualified or no cash,” he said.

The housing market has stabilized and is beginning to improve, said Greg Gross, director of Metrostudy, a housing research and consulting firm in Las Vegas.

Metrostudy reported 1,390 new-home starts in the fourth quarter, up 95 percent from 712 starts in fourth quarter of 2011. For the year, they increased 60 percent to 5,548.

“The good news is that production is increasing and at the same time we are seeing price increases,” Gross said.

PLAZAS PURCHASED

Marcus & Millichap Real Estate Investment Services announced the sale of The Plazas, a 20,766-square-foot office complex at 4535 W. Sahara Ave., for $975,000.

The short sale, approved by Bank of America, was well below replacement cost, said Tina Taylor, investment specialist in Marcus & Millichap’s Las Vegas office.

Rutt Premsrirut, who purchased the property along with his sister, Puoy, said he believes in the long-term economic viability of Las Vegas and foresees a rebound in the office sector.

“Although vacancies are currently high, many buildings are trading below replacement cost, which will limit new inventory coming to market,” he said.

APARTMENT MANAGER

San Diego-based Sunrise Management has hired multifamily specialist Kathy Relyea to run the company’s new Las Vegas office.

She will concentrate on increasing the company’s Las Vegas market share and directing long-term marketing, strategic planning and day-to-day activities.

Sunrise recently took over the 183-unit Boulder Palms Senior Apartments, and Relyea is charged with optimizing value and spearheading capital improvements for that property.

COMMERCIAL TRANSACTIONS

Pat Marsh and Grant Traub of Colliers International represented Panattoni Development in the sale of a 30,467-square-foot office and warehouse at 1545 Pama Lane to the trust of Antonio Quan Chan and Estrellita Lua Chan. The transaction’s total value was $3.43 million.

Dana Souter of Fortis Commercial Advisors negotiated the sale of a 7,000-square-foot industrial property at 3808 Octagon Road for $420,000. Souter represented both the buyer, Performance Building, and the seller, KM&SC Enterprises.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.