Record-High Vacancy in Vegas Retail: 5%

LAS VEGAS-Vacancy in the retail market here jumped to 5% in the first quarter from 3.8% at the end of the year, according to a new report from Applied Analysis, a locally based business research and advisory firm. The increase is due to both new supply outstripping demand and store closures by retailers affected by the local residential market, according to Applied Analysis principal Jeremy Aguero.

The retail market here expanded by 1 million sf in the first quarter, while market demanded (or absorbed) 371,000 sf of space. In addition, recent market conditions, including the performance in the residential sector, prompted the closing of various regional and national outlets throughout the valley, including CompUSA, Levitz Furniture and Rite-Aid stores. Additional closures are likely for retail centers that are currently occupied by Wickes Furniture, which is in the process of winding down their operations, according to the report.

“It is clear that retailers, particularly those tied to the residential market, have been impacted by the latest slowdown in the overall economy,” Aguero says. “Not only do taxable sales activity reports confirm the current performance, but recent retail outlet closures are a clear signal of instability. Consumer spending levels are coming off unsustainable highs, propped up by home equity extractions and record-low home interest rates. Retail inventory growth was tracking this trend, and the combination of high residential vacancies and reduced consumer spending is an unfavorable condition for retailers and retailer space developers.”