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Vegas Retail Expansion Continues Unabated

LAS VEGAS-One million sf of new retail centers during the first half of the year was met with nearly 900,000 sf of net absorption, keeping vacancy low and rents on the rise. Some 3.7 million sf remains under construction.

By Brian K. Miller | Updated on July 23, 2006

LAS VEGAS-The Las Vegas retail market expanded by more than 500,000 sf during the second quarter and net absorption wasn’t far behind, keeping vacancy under 3%, according to the latest numbers from locally based Applied Analysis. The rise in land and construction costs is pushing rental rates to the edge of what retailers can make work, especially if high consumer spending in recent years cools off, according to the principals of locally based business consultancy and market research firm.

Several new retail centers were completed during the quarter, adding 512,000 sf to the market and bringing the total to 43.3 million sf, according to Applied Analysis’ latest market report. Net absorption largely kept pace at 399,000 sf, resulting in only a 20 basis point bump in the overall vacancy rate to 2.7% or 1.2 million sf since the end of March.

Through the first half of the year, one million sf has been added to the market and net absorption has totaled 878,000 sf, keeping vacancy 40 basis points below last year’s mid-year mark of 3.1%. The one million sf completed in the first six months of 2006 is nearly as much as was completed in all of 2005, according to the report, and more is on the way as some 3.7 million sf remains under construction.

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