For Immediate Release
Colliers Las Vegas Releases Q4 Market Research Report
Southern Nevada’s Economic Recovery Continues Upward with Record-Breaking Pre-2020 Lockdown Levels
LAS VEGAS – January, 20, 2022 – Commercial real estate in Southern Nevada has made a significant recovery in Q4, dramatically improving from 2020’s lockdown-induced recession. Evidence suggests the pendulum has swung following investors and developers showing continuous interest in the local real estate market.
Although Southern Nevada’s economy has largely recovered, there is still room for improvement to return to pre-COVID-19 levels. According to Colliers Q4 findings, the following areas are of note suggesting a complete economic recovery in 2022:
Southern Nevada’s industrial market experienced record demand in 2021, with net absorption hitting an 11.6 million square feet new record, compared to the previous record of 7.8 million in 2017. With the economy in recovery, pre-leasing space scheduled for completion in 2022 is on track and developers are preparing for 2023.
Industrial development and demand hit an all-time high in 2021. With thousands of new residents moving to Southern Nevada, residential sales and renting continue upward. While master-planned communities are under development in the East Henderson, North Las Vegas, and the far Northwest regions of the valley, large tracts of developable land are becoming scarce. Investments toward redeveloping under-occupied office buildings and retail developments serve as possible solutions. Additionally, investors and developers will need to source land in the northwestern and southwestern fringes of the region, including the Boulder City area and Sloan.
Southern Nevada’s retail market registered its strongest year since the 2020 lockdowns, including the Great Recession of 2007. Despite increased inflation, the retail market has seen extreme growth and the high pressure of the e-commerce industry and big-box consolidation. While retail demand is hitting record-breaking highs, vacancy rates hit new lows, including a strain in development. However, increasing property retail rates should cause an increase in retail development in 2022.
Southern Nevada’s medical office market effectively rebounded from 2020, posting its best net absorption since 2017, congruent with its lowest vacancy rates in more than a decade. Additionally, the medical office market reached its lowest vacancy rate in a decade this quarter as the Valley continued to rebound from the 2020 lockdowns. Overall, demand favored suburban Class C office buildings, and we believe this demand will continue in 2022.
Southern Nevada’s office market recovered to pre-pandemic rates, showcasing the lowest office vacancy rates since the 2007 recession. Although Class A office product is still facing vacancy rates up to 25 percent, Class B and Class C office space in suburban markets are upward. Long-term trends have favored suburban office products and smaller office footprints believed to be a result of COVID-19 and the impact of technology. These long-term trends are expected to continue in 2022 and Southern Nevada’s office market will continue recovering and expanding.
Southern Nevada’s hospitality market reached new highs and is on track for full recovery since the 2020 lockdowns. Taxable sales are up 90 percent compared to 2019, and gaming revenue has reached an all-time high, surpassing 2019’s rates in the 2021 year. However, this is not the only significant hospitality data point; in 2021 alone, hospitality investors represented more than $4 billion in sales volume. Assuming the COVID-19 pandemic takes a downward trend allowing convention business to improve, Southern Nevada’s hospitality market should substantially recover by the end of 2022.
Full report available for download here: https://www.colliers.com/en/research/las-vegas/2021-q4-las-vegas-lvqr-market-research-report