Industrial: The Las Vegas Valley’s (“the Valley”) Industrial market1 grew total inventory to 117.4 million square feet (“sf”) of rentable space with 2.7 million sf of completions in the second quarter (“Q2”) of 2017. Net absorption (net demand) in Q2 increased sharply from the previous quarter to 2.0 million sf. Still, the Valley’s Industrial vacancy rate increased by 0.5 points to 6% in Q2, 2017. The vacancy rate is up by 0.8 points, when compared to Q2, 2016. At $0.69 per square foot (“psf”) NNN2 , the average monthly asking rent is down a nickel from Q1 ($0.74 psf), and is down $0.11 from Q2, 2016 ($0.80 psf). Even after this quarter’s big completions, forward-supply3 remains substantial with 4.5 million sf under construction and another 6.5 million sf in the planning stages. 98.1% of the space under construction is of the Warehouse/Distribution type, as is a large proportion of the planned space (96.3%). The Industrial market is recovered and stable.
Speculative Office: The Las Vegas Valley’s (“the Valley”) multi-tenant, Speculative Office market1 saw no new space come to market in the second quarter (“Q2”) of 2017. There are currently 26,480 sf under construction, with another 566,000 sf in the planning stages. Demand for space in Q2, 2017 was strong compared to previous quarters with 465,637 sf absorbed. This helped push down the Spec Office market vacancy rate by more than a point, from 20.3% in Q1 to 19.2% in Q2. Average monthly asking rents held at $1.95 per square foot (“psf”) FSG2. Demand in the Valley’s Spec Office market has grown steadily from a year ago when absorption was negative.
Anchored Retail: The Las Vegas Valley’s (“the Valley”) Anchored Retail market1 inventory (we do not track unanchored properties) remained at 44.3 million square feet (“sf”) at the close of the second quarter (“Q2”) of 2017 with only one completion over three months. Though demand was a meager +9,254 sf, it was better than the previous quarter when net absorption totaled -110,806 sf. After Anchored Retail’s vacancy rate climbed 0.3 points in Q1, it paused in the second quarter, remaining unchanged at 10.8%. This is 0.3 points better than the 11.1% recorded in Q2, 2016. Average monthly asking rents increased by $0.01 to $1.00 per square foot (“psf”) NNN2 in Q2. Compared to the previous year, rents are up $0.04. Forward-supply3 remains notably large at the end of Q2 with 374,943 sf under construction and another 821,550 sf of planned space for a total of 1.2 million sf.