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Industrial, office, retail use rises from a year ago | News

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Industrial, office, retail use rises from a year ago
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Chart by Ned Wolfenbarger

LAS VEGAS -- The Las Vegas Valley registered improvement in industrial, office and retail use in the fourth quarter of 2014 compared to a year earlier, according to a survey released recently by RCG Economics of Las Vegas and UNLV's Lied Institute for Real Estate Studies.

The survey found the valley ended the quarter with an industrial vacancy rate of 7.2 percent, an improvement from 11.8 percent a year earlier. The vacancy rate peaked at 15.5 percent in the third quarter of 2012, after which demand for industrial space began increasing.

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Last quarter saw a net gain of more than 1.5 million square feet of industrial space in use, the ninth straight quarter of increases in the valley.

“Performance metrics for the valley's industrial market in the last four quarters indicate that we are now in the midst of a recovery, and in some submarkets, fully recovered and growing once again,” the survey concluded.

Vacancy rates in the multi-tenant, speculative office market dipped to 21.3 percent at the end of last quarter, an improvement from 23.8 percent in the final quarter of 2013. There was also a net gain of 136,600 square feet of office use, marking the fifth straight quarter of gains in that category.

“While it is true that Southern Nevada's office market's recovery has lagged behind that in the industrial and retail markets, 2014 saw a significant increase in demand,” the report stated. “Net absorption in 2014 was double that in 2012, the last year of strong office recovery. If this trend continues through 2015, office vacancy might drop below 20 percent for the first time in six years.”

The anchored retail market posted a vacancy rate of 11.4 percent at the end of 2014, an increase from 11 percent in the third quarter but an improvement from 11.6 percent in the fourth quarter of 2013.

“If consumer spending continues to grow through 2015, expansion by existing retailers and new retail concepts will likely enter Southern Nevada,” the report stated.

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