Relocating businesses face challenges in downtown Las Vegas

As a rock climber, Stephanie Forte conquers cliffs that would make most people's palms sweat just by looking at them.

But a search for office space in downtown Las Vegas left her at the end of her rope.

On Dec. 20, Forte, who owns a small public relations firm called Forte Creative Media, took her frustration to Facebook.

"The idea was to be a part of the growth and community in downtown Las Vegas. The result is one huge headache and a lot of wasted time," the typically upbeat Forte said. "Unreasonable commercial real estate owners make suburbia look more appealing."

Exactly one week later, Forte posted another update.

"Climbing taught me to hang on even when my skin is raw & bleeding. Marathon running taught me to keep going even when it seemed impossible," she wrote beneath a snapshot of her new lease. "Perseverance pays off: a new home for FCM in Downtown Las Vegas. Finally!"

A little later Forte and her small staff gathered in the new space, a 1940s-era house on Seventh Street.

They shared snacks, champagne and a few laughs over some of the spaces they saw before finding a cute and clean home for the business.

They described seeing - and smelling - a property that reeked due to the decaying bodies of cats nearby, which the owner promised would be removed.

Another property appeared to have had someone living in it recently, despite holes in the flooring.

"I was really shocked at some of the places people pitched to us," Forte said. "I was surprised they would show a spot in that condition."

While the details of Forte's experience might be unusual - squatters' quarters and dead animals rarely come up during commercial real estate searches - the overall story arc isn't.

Small-business owners looking to relocate to downtown Las Vegas should expect challenges they wouldn't face in the suburbs.

Space downtown is harder to come by, a little more expensive and, more often than not, isn't part of a spiffy office park with grassy lawns, fountains and big parking lots.

According to a Las Vegas office market report from Applied Analysis, the vacancy rate downtown is 9.5 percent compared to 25 percent for the valley. The average lease rate downtown is $2.26 per square foot compared to $1.89 valleywide, the report states.

"If you are looking for Summerlin or Green Valley, you are basically going to find your Class A or Class B in big office parks," said Terry Murphy, who owns a small office building downtown. "We don't have that downtown. You are either going to be in a high-rise or a small house somewhere."

But businesses looking to be close to the economic and cultural action find limited availability, quirky spaces and even, in some instances, higher prices are worth it.

The pending move of online apparel retailer Zappos into the former City Hall at Stewart Avenue and Las Vegas Boulevard and Zappos CEO Tony Hsieh's $350 million, privately funded Downtown Project are driving interest in a formerly forlorn area.

Hsieh's efforts are attracting tech startups, bars, clubs and restaurants; and city-supported projects, such as the Smith Center for the Performing Arts, Mob Museum and Neon Museum, are improving the cultural climate.

The concentration of new activity has made downtown a better place for business networking. Attorneys, public relations specialists, accountants and anyone else looking for new business can make connections over coffee, at the bars or at new restaurants.

"You trade the big office and the convenient parking space outside for the fun of working downtown," Murphy said.

While downtown still has trade-offs that some businesses are unwilling to make, there already is an effort to improve the real estate climate.

Zach Ware, who handles many of the logistics for Hsieh's Downtown Project, is also part of a venture called Work in Progress that's installing about 20,000 square feet of flexible work space throughout downtown.

The idea is to provide shared and some private work spaces for subscribers to access. It's an attempt to create commercial space that is great for networking and also eliminates the commitment of long-term leases, which Ware says can make it hard for certain businesses to find a home.

"You are pretty much boxed into some kind of space assuming it is going to work for you for five or six years. We don't think that makes sense," Ware said. "There is not a lot out there that doesn't cost people a lot of money or follow the traditional lease model."

Forte, who said she was feeling isolated living and working in suburban Las Vegas, said she is glad she persevered through the challenges to find a great space.

It's an opportunity, she said, to help downtown Las Vegas evolve from an afterthought to a bustling, creative hub like Austin, Texas, or the Brooklyn borough of New York City.

"If you don't support it, how is it going to get there?" she said.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-383-0285 .