January 2020: Commercial Real Estate

January 2020 Commercial Real Estate

Colliers reported that Las Vegas is expecting the completion of close to 460,000 square feet of new office spaces over the next four quarters. The Las Vegas commercial market experienced a breakthrough due to an increase in the number of new constructions since 2018.

“While southern Nevada’s medical office market rebounded from its dip into negative net absorption in the second quarter, it remains less robust than it was in 2018. Net absorption is generally lower this year than last, but no significant medical office development is expected in 2020,” according to Nevada Business.

However, even though pre-leasing is strong in new construction, Southern Nevada deals with demand issues. The lack of desirable office spaces leads to slowed progress. Real estate experts, however, remain positive with the medical office developments, as it has the potential to fill the void in the demand.

December 2019: Commercial Real Estate

The commercial real estate of Las Vegas has strong numbers since the beginning of the year. The impressive performance continues towards the end of the year, mainly due to Las Vegas’ continuing robust industrial expansion. As a result, real estate developments in the state will not cease anytime soon.

According to the Commercial Real Estate Report published in Nevada Business by CBRE, since 2015 developers have constructed more than 23 million square feet of industrial space. 2019 is shaping up to be another record-breaking year for new construction, as more than 3.3 million square feet of space was completed in Q3 2019, making it the highest amount of new space constructed in a single quarter in the market’s history.

The construction projects completed this year include Prologis I-15 Speedway, buildings 3 and 4 (1,008,588 square feet), SunCap Property Group/Colony Industrial SunPoint Crossing, buildings 1-3 (752,384 square feet), and Hines’ Raceway Industrial Park (670,798 square feet).

More projects are in the pipeline but those that broke ground include Trammell Crow Company’s Golden Triangle Logistics Center-Phase I (1,002,538 square feet) and Matter Logistics Center @ West Cheyenne (725,840 square feet).

These projects prove Southern Nevada’s position as a top tier industrial market in the region.

November 2019: Commercial Real Estate

According to a Nevada Business report, Northern Nevada had approximately 60 lease transactions in the second quarter of 2019. All of the properties are under 10,000 square feet.

In Southern Nevada, on the other hand, there were 139,000 square feet projects accomplished and 783,000 square feet under construction during the same period. Although many retail businesses were closing or downsizing, the report remained enthusiastic about the new kinds of retail businesses that look into setting up operations in Southern Nevada.

In more recent news, Bloomberg reported that New York-based financial firm, The Blackstone Group. is looking into buying and leasing back MGM Resorts International’s Bellagio and MGM Grand. The two MGM properties generated about $710 million combined profit last year, making them the top generators of operating income among MGM’s properties.

The Blackstone Group is among the many investors who buy cheap houses in Las Vegas to turn into profitable rentals when its economy declined and is no stranger to high-profile property deals.

October 2019: Commercial Real Estate

The number of commercial properties for lease and sale has increased compared to the previous month. Investors looking for space have a lot of options in Las Vegas.

It seems that the recession will not make much of an impact on Southern Nevada. If ever, its impact will not come close to the impact brought about by the Great Recession in 2008.

According to a report from Nevada Business, “Whatever economic storm will greet Nevada in 2020, Southern Nevada’s commercial real estate market should be better positioned to weather a storm than it was a decade ago.”

“A rare building fire and a dearth of new completions caused the Valley’s office inventory to shrink in the second quarter of 2019. With significant net absorption posted in the two previous quarters, Southern Nevada’s office market looked poised for a major expansion in 2019,” the report also revealed.

September 2019: Commercial Real Estate

The commercial real estate of Southern Nevada had a remarkable second quarter. The industrial market showed development. In a report from Nevada Business, Research Manager of Colliers International in Las Vegas John Stater said, “Southern Nevada’s industrial market posted 1.8 million square feet of net absorption in the second quarter of
2019, with the bulk of that net absorption coming from two build-to-suit projects in North Las Vegas.”

The medical office market slowed down in the second quarter even if it anticipated growth. On the other hand, warehouse or distribution buildings and multifamily projects have shown signs of growth as developers and investors are eager to pay extra for land in Southern Nevada.

Southern Nevada seems to be unaffected by the recession. It seems capable to weather the storm the recession may bring to the real estate market.

May 2019: Commercial Real Estate

One of the biggest projects under construction in Nevada right now is the Las Vegas Stadium. The other ones include the development of The Drew, Las Vegas Convention Center, and Resort Worlds.

The Las Vegas Valley retail market is moving in expansion mode in 2018 and consists of approximately 113 million square feet including 13.5 million square feet of power centers. There is a drop of 6.3% in the current vacancy rate compared to last quarter.

The number of properties for lease decreased to 74 from 96 last month. Whereas the number of properties for sale increased to 32 compared to last month’s 24.

Projects delivered in the 4th quarter of 2018 still have 1 million square feet under construction. There are tenants closing or downsizing but there are new businesses that are starting to develop, like those that are supported by Amazon or Google. Quick service restaurants from other states are also expected to look for a perfect spot.

April 2019: Commercial Real Estate

It’s hard to keep up with the present demand of the industrial real estate in Southern Nevada. Southern Nevada is strong in industrial activity. Las Vegas has a population of 2.2 million people with 130 million square feet of industrial space. Larry Monkarsh, owner of LM Construction and a partner of Brass Cap Development said that he does not see the industrial real estate slowing anytime in 2019. He also added that there’s a good amount of outside investment coming into the Las Vegas industrial market and plenty of the new buildings are driven from companies coming in from out of the state.

Las Vegas’ medical office real estate has two years of strong growth and demand. The inventory has grown to 614,367 square feet over the past couple of years. The healthcare market is in a good position now compared to previous years. The vacancy rate was 15.6% in 2016 and the current vacancy rate is 12.1%.

March 2019: Commercial Real Estate

According to CBRE Las Vegas’ report, Developers completed more than 3.1 million square feet of new space in 2018. A space of 10.8 million square feet is currently planned or under construction. This can make 2019 another record year for new construction in Southern Nevada. Las Vegas has one of the fastest job growth and population areas. While economists are predicting a recession this year, Southern Nevada’s population is expected to grow so the vacancy rate will drop lower, which indicates a demand.

Nevada Business has reported that growth has been a result of an increase in national retail and e-commerce companies establishing regional distribution and fulfillment centers in Southern Nevada. Nearly 40% of the total square feet leased were by retail or e-commerce related companies. One thing to look forward to is the opening of the Las Vegas Ballpark in Summerlin on April 2019. Summerlin has moved up to No. 3 in the nation in terms of sales last year. It is the first time it has reached the top three since 2003.