When developer Sansone Companies announced it broke ground on an upscale office project in the southwest Las Vegas Valley, the job market had been improving for years and companies were taking more office space.
The next month, the coronavirus outbreak upended daily life in Las Vegas and devastated the economy, turning the Strip into a ghost town of shuttered resorts as the valley’s jobless rate shot past 30 percent.
It also prompted waves of employers, locally and nationally, to send white-collar staffers home over fears of the virus, raising questions about how much office space firms really needed as people worked from their couch, kitchen table or in-home office.
The pandemic, of course, is far from over, and Las Vegas’ office market still faces plenty of questions. But Sansone’s bosses are pushing ahead with their glass-and-steel complex, Axiom, and say they are fielding plenty of interest from prospective tenants.
Axiom, off Rainbow Boulevard just north of the 215 Beltway, is slated to feature two four-story office buildings with a three-level garage between them. The roughly $30 million first phase, consisting of one office building and the garage, is slated to be completed as soon as next month, according to Neil Sansone, a principal with the firm.
He estimated the building is more than 30 percent leased and said negotiations are underway with tenants for additional space. The developers hope to break ground on the second building next year.
Sitting just along the Beltway, the first building cuts a distinctive look with its reflective blue-glass panels, angled design and Nike-esque swoosh slicing through the exterior.
Sansone’s brother Miles Sansone, also a principal with the firm, said leasing activity hasn’t slowed amid the pandemic but noted that deals are taking longer to come together, adding his group is fielding plenty of calls about the property and giving tours.
“We felt that a building like this will definitely help define or drive a tenant’s identity or branding. … To us, this is hard to miss,” he said.
Overall, Southern Nevada’s office market was “hit hard” by the pandemic and is now “kind of back to where we started,” said John Stater, Las Vegas research manager with brokerage Colliers International.
Net absorption, or the difference in occupied square footage from one period to another, fell by 325,447 square feet in 2020, Colliers data indicates. This year through the second quarter, absorption climbed by 296,240 square feet.
Plenty of office workers are still exiled from their buildings, and Stater figures such arrangements will constrain demand for space “to some extent” but not drastically.
He noted that if vacancies rise, it would push prices down and could spur more deals.
Sansone Companies, founded by Miles and Neil’s dad, Roland Sansone, isn’t the only group developing more office space in Las Vegas, nor is it the only one building in the southwest valley, which for years has been among the fastest-growing areas of Southern Nevada.
Matter Real Estate Group is developing UnCommons, a 40-acre mixed-use project in the southwest valley that is slated to feature more than 500,000 square feet of office space.
Developer Joe Sorge is building Evora, a 42-acre mixed-use venture in the southwest that calls for 240,000 square feet of office and other commercial space, and Summerlin developer Howard Hughes Corp. is constructing a 10-story office building next to Las Vegas Ballpark.
When Hughes Corp. announced plans for the project in January, the company’s Las Vegas regional president, Kevin Orrock, said he believed workers would want to come back to their offices.
“People are social animals,” he said.