Office market surges in first quarter
BY TONY ILLIA
BUSINESS PRESS
April 07, 2006
The Las Vegas Valley office market recorded a low 8.4 percent vacancy rate during the first quarter, a 1 percent drop from a year ago, despite 742,800 square feet of net absorption, reported Applied Analysis, a local business advisory firm. Local office use, during the past few quarters, has been at its strongest levels since 2000.
"Despite above average market expansions through the first quarter of 2006, the office sector held its ground as demand nearly matched new supply," said Brian Gordon, principal of Applied Analysis. "The amount of space that came online during the current quarter matched last year's record-setting quarterly average, and was well above the nearly one-half million square feet quarterly average posted during the past decade."
The Southern Nevada office market grew to 38.1 million square feet in 1,403 buildings in the first quarter. Major completions included the new 50,000-square-foot G.C. Wallace headquarters inside Centra Point at Durango Drive and the Intestate 215 Beltway and Plise Companies' 111,000-square-foot office building inside its Rainbow Sunset Pavilionat Rainbow Boulevard and Sunset Road. There was also 4.6 millionsquare feet of new space under construction in the first quarter, including Marnell Properties' new five-story, 112,000-square-foot office building inside Marnell Corporate Center at Sunset Road and Las Vegas Boulevard South; and Glen, Smith & Glen Development's 97,200-square-foot The Park at NorthPointe at Alexander Road and Martin Luther King Boulevard in North Las Vegas.
And there was another 3.6 million square feet of office space planned for future development. Offices using professional and business services added 10,100 new jobs during the past 12 months, reported the state Department of Employment, Training and Rehabilitation, making it the valley's third largest employer behind the resort and construction industries.
"Continued economic growth in Las Vegas is driving office absorption and pushing investment activity to new heights," said Christopher LoBello, regional manager of Marcus & Millichap's Las Vegas office. "A number of new projects are coming online, but strong tenant demand will keep supply and absorption in balance."
The city of Las Vegas had the valley's lowest office vacancies at 6.5 percent, while North Las Vegas had the highest at 17.2 percent. Henderson, however, had highest median asking rents at $2.34 per-square-foot, and unincorporated Clark County had the lowest at $2.10 per-square-foot.
Valley median asking rents, meanwhile, were $2.17 per-square-foot in the first quarter, or 22 cents higher than a year ago. Office rents are expected to continue to climb upward in the future due increased development costs with spiraling labor, building materials and vacant land prices. Rents, as a result, are expected to rise by 15 percent during the next year to keep pace with inflation.
"We continue to see above-average rental rate growth in the speculative sector, while rising land and construction costs will continue to drive rates north," Gordon said. "While the supply-side is facing record development costs, the demand-side of the equation is supported by the third-fastest growing segment in the local economy, professional and business service office users."
PROJECTS
The Ladeki Restaurant Group is opening a new $1 million, 3,500-square-foot Sammy's Woodfired Pizza restaurant in Montecito Market Place at 7160 N. Durango Drive. The 170-seat facility will open by summer. A contractor has yet to be named.
Southwest Engineering is providing $550,000 worth of site surveying, staking and engineering for a 100-acre residential subdivision called Marble Canyon in Bullhead City, Ariz. Developed by Southwest Homes, plans call for 404 residential lots, each 6,000 square feet in size. The site is bound by Hancock and Alta Vista roads, and Arcadia Boulevard.
Burke & Associates recently broke ground on the $7 million, 65,000-square-foot Wingate Inn and Suites at St. Rose Parkway and Seven Hills Drive in Henderson. Designed by Gerald Garapich, AIA LLC, the 4-story, 69-room project is scheduled to finish in November.
Graham Downes Architecture is designing the mixed-use residential, retail, office complex on 11 acres at Main and Washington streets in downtown Las Vegas. Downes is working with HCA Architects, as architect-of-record, in association with assemblageStudio. BLOKHAUS, a development company founded by Graham Downes, is the developer. Plans call for 500 condominium units, along with office and retail space. Design is scheduled to finish by year's end, with construction slated to begin in 2007.
SR Construction recently completed the new $915,000, 4,000-square-foot Island Pet Animal Hospital at 7025 West Ann Road in Las Vegas. SR's Phil Foster served as project manager, with Robert Longsden as project superintendent.
MILLION-DOLLAR DEALS
Picerne Development Corp. bought five acres of vacant land on College Avenue in Henderson for $17,272,500, or $3,454,500 per-square-foot, from Revere LLC. Colliers International's Michael Stuart represented both the buyer and seller.
Apache Structures bought five acres of land at the northwest corner of Ft Apache Road and Ali Baba Lane for $5.5 million, or $1.1 million per acre, from Ft. Apache Partnership. CB Richard Ellis' Derek Rafie represented the buyer.
Newmarket Advisors bought 7.81 acres of land at the northeast corner of Craig Road and Commerce Street in North Las Vegas for $4.5 million, or $576,184 per-square-foot, from A.N. Financial Corp. CB Richard Ellis' Keith Spencer represented the seller.
Copper Sage Commerce Center bought 8.46 acres of land at the southeast corner of Lamb Boulevard and Cartier Avenue for $2.9 million, or $342,790 per acre, from Trans-Aero Land Development Co. CB Richard Ellis' Greg Tassi represented the buyer.
University Medical Center of Southern Nevada signed a 10-year, $1.85 million lease for 10,343 square feet of office space at 901 Rancho Lane. CB Richard Ellis' Bruce Follmer, Jan Hoback, and Carla Cole represented the landlord, AHP of Nevada Inc. The reported the average rent equals $1.49 per-square-foot.
Cafe Wasabi signed a 10-year, $1,385,520 lease for 3,012 square feet of retail space in Montecito Marketplace at the southeast corner of Durango Drive and Elkhorn Road. Avalar Realty's Tony Killebrew represented the tenant, and Gateway Realty's Chris Godino represented the landlord, Montecito Companies. The reported average rent equals $3.83 per-square-foot.
Southern Nevada Oxygen Inc. bought an 8,315-square-foot industrial building at 187 N. Gibson Road in Henderson for $1,283,825, or $154 per-square-foot, from Severson & Smith. Colliers International's Michael De Lew and Greg Pancirov represented the buyer, and Colliers International's Patti Dillon represented the seller.
Mckeekeeny L LLC bought 10,000 square feet of retail space at the northwest corner of Grand Canyon Drive and Russell Road for $1.15 million, or $115 per-square-foot, from Las Vegas Corners L LLC. CB Richard Ellis' Penny Mendlovic and Randy Broadhead represented the seller.
One 11, a graphic design company, signed a five-year, $1,151,479 lease for 12,890 square feet of commercial retail space in Holsum Lofts at 241 W. Charleston Boulevard, Suite 110. LaPour Partners' Lisa Chasteen represented her company as landlord. The reported average rent equals $1.49 per-square-foot..
If you are planning to relocate in the Las Vegas area, contact us for a prompt response to any questions you have about the Las Vegas real estate market. We invite you to visit our website to view updated daily listings of Las Vegas homes at Free Las Vegas Homes MLS Search
