WinCo stores save the day for retail

If it weren't for a couple of WinCo Foods grocery stores that opened in March, Las Vegas would have seen a net loss of about 30,000 square feet of retail space occupied during the first quarter, a Colliers International research analyst said Monday.

There are no new retail stores now under construction, which is understandable in a market with 11.6 percent retail vacancy and distressed shopping centers on nearly every corner.

Many companies are vacating space, perhaps closing their doors or downsizing, especially with all of the deals out there, Colliers research director John Stater said.

Most retail expansion is by restaurants and cost-conscious retailers such as WinCo, Savers and Dollar General stores, he said. Planned expansions are coming from Genghis Grill, Chronic Tacos and Don Tortaco.

"The big word is bifurcation," Stater said. "The low end is doing well and the high end is doing well, but if you're stuck in the middle, you might be in trouble."

About 4.2 million square feet of Las Vegas' total 44.2 million square feet of retail inventory is distressed - either owned by the bank or in default - a decrease of 600,000 square feet from a year ago, Colliers reported.

Vacancy remained stable from the fourth quarter, but rose from 11.3 percent a year ago. Asking rents also stayed the same at $1.38 a square foot per month, but dropped from $1.56 a year ago.

The last major retail development to open in Southern Nevada was Tivoli Village at Rampart Boulevard and Alta Drive, though shopping centers such as Village Square and The District at Green Valley are undergoing renovation under new ownership.

Stater said big-box retailers such as Best Buy Co. and Wal-Mart Stores are downsizing shops and carving out chunks near the entrance to rent to other tenants.

"We've got all these big boxes that are not going to get filled up," Stater said. "Vegas is on the verge of a 15- to 20-year process of rehabilitating big boxes."

After decreasing in the fourth quarter, net absorption climbed to 163,000 square feet in the first quarter, much of it due to the 195,000 square feet that were built and immediately occupied by WinCo. Without that, net absorption would have been in negative territory, Stater said.

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