Retail vacancy in Las Vegas hovers in tight range
Retail vacancy in Las Vegas has remained in a relatively tight range during the past three years, showing a modest increase to 10.5 percent in the second quarter, Applied Analysis business advisory firm reported.
Vacancy is up just 0.1 percentage point from the previous quarter and from a year ago, suggesting stability in the retail sector, Applied Analysis principal Brian Gordon said.
Nothing new in retail development came onto the market in the second quarter and only 311,000 square feet are under construction, almost all of it in the second phase of Tivoli Village. The addition to the high-end shopping center at Rampart Boulevard and Alta Drive is expected to be completed by the end of 2013.
Another 11,000 square feet is being added to WinCo Foods in Henderson and the Albertson’s center at Rainbow Boulevard and Warm Springs Road.
Average asking rent climbed to $1.47 a square-foot in the second quarter, compared with $1.45 in the previous quarter and $1.51 a year ago, Applied Analysis reported.
Retail vacancy is double or three times what would be considered normal for Las Vegas, said John Stater, research director for Colliers International.
“Even when things start to do well and we see positive absorption, I have a feeling vacancy rates will remain elevated just because you have a lot of buildings constructed that have no real use in the market,” Stater said Monday. “There was never real demand for them.”
Colliers showed retail vacancy rate at 11.1 percent in the second quarter, unchanged from the first quarter and a 0.4-point increase from one year ago. Average asking rent stands at $1.40 a square-foot on a triple-net basis, which means the tenant pays taxes, insurance and maintenance costs. It’s down 2 cents from a year ago.
Retail net absorption, or the amount of space leased versus space vacated, was 151,251 square feet in the quarter. That’s an increase of 12,346 square feet from the previous quarter.
While retail employment dropped between January and February, it has been on the rise for the past three months, the researcher noted.
With taxable sales, gaming revenue and hospitality employment all heading in the right direction, the outlook for suburban retail is more positive now than it was one year ago, Stater said.
“If Southern Nevada is to extend its retail recovery, it seems likely that it will have to rely on smaller, local retailers to do so,” he said.
Filling big-box space could be a long process, especially given the current trend in big-box retailing to downsize their stores.
“It’s almost like every big-box retail that’s emptied out is going to need two big-boxers to fill it, and since nobody is really expanding, it just suggests that factor will elevate retail vacancy, even though in many respects, the market is getting better,” Stater said.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.