Overall vacancy was 3.2% at the end of the third quarter, the same as one year ago, and won't be rising a whole lot farther in the near term, says Jeremy Aguero, principal of Applied Analysis, a local business research and advisory firm that tracks the real estate market.
"Fundamentals within the commercial retail market remain stable despite quarter-to-quarter variances in supply and demand," he says. "By the end of 2007, the market will expand by its largest annual tally in recent history. It is worth noting that a substantial share of space entering the market has been pre-leased, which will continue to hold average vacancies below 5%."
That having been said, Aguero says he is "somewhat" concerned about the depth and breadth of consumer spending patterns, particularly in the face of a declining residential sector performance. Given the region's longer-run outlook for economic growth, however, Aguero predicts the trend "will have only a modest impacts overall."
The retail product type with the highest average vacancy rate, at 4.5%, is neighborhood centers. Power centers come in at the other end of the model with a 1.9% vacancy rate. Power centers also boast the highest average asking lease rate at $2.39 per sf. The average asking rate for neighborhood centers is $2.11 and for community centers it is $1.99.
By submarket, the highest retail vacancy rate, 4.8%, is in North Las Vegas, which has the smallest retail base at 3.6 million sf and the highest asking lease rates at $2.49 per sf. The lowest vacancy rate, 2.3%, is in unincorporated Clark County, which has a retail inventory of more than 18 million sf and an average asking lease rate of $2.18 per sf.
The vacancy rate in the City of Las Vegas, which is home to 15.8 million sf of retail, is 3.3%, and the average asking lease rate is $2.05 pr sf. The City of Henderson, which has just over 9 million sf of retail inventory, has a vacancy rate of approximately 4.4% and an average asking rate of $2.04 per sf.
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