Online shopping was already changing the face of retail when COVID hit and everything closed down. Without the ability to shop brick-and-mortar stores, consumers ramped up ordering online with delivery. Some physical stores closed, mom and pop or regional among them. Others were able to thrive post-lock down, pivoting and taking advantage of new shopping trends, from delivery to curbside pickup to order online and picking up in store.
Death knells for brick and mortar have been prophesied before, but it turns out shoppers like to shop. People like the tangible experience, and today they’re attracted by the experiential element built in as retail centers add attractions from escape rooms to golf, or build experiences in during development.
Somewhere between dire predictions of shuttered shops and forever empty retail properties, and the reality of Nevada’s currently bright retail landscape, the vacancy rate for existing retail properties has shrunk. It’s down to the lowest it’s been in about 15 years, or since the Great Recession threatened the very existence of retail. Everything from freestanding buildings with drive throughs in neighborhood shopping centers, to big box-anchored centers is in demand.
Nevada’s Retail Shops and Shoppers
“I’d best describe it as holding very steady,” said Todd Manning, managing broker, NAI Excel, regarding southern Nevada’s retail market. “We have a lot of concepts and retailers that are novel to the market in the last two years. They’ve really taken a strong look at Las Vegas. As our profile has grown, more and more retailers want to be here, more and more concepts want to be here. The biggest problem we have is the limited supply [of properties].”
Vacancy rates dropped to their lowest point in 15 years in 2024, and are currently in their next-to-lowest, around 5 percent. “That side of [retail] is really healthy. I say it’s holding steady because nationally there’s a lot of uncertainty both from the consumer and from retailers about trade and how everything is going to impact the market, but so far it hasn’t had an impact on the consumer,” said Manning.
“The retail market in southern Nevada is very robust. We have very low vacancy,” said Liz Clare, principal, retail investments, Avison Young. The vacancy rate is hovering between 4.5 and 6 percent, averaging 5 percent across the different categories of retail properties. Grocery-anchored centers in high household income areas are apt to be 100 percent full.
There are new projects on the Strip, new platforms like BLVD and 63 CityCenter, drawing in high-end restaurants like Ocean Prime and celebrity restaurants like Blake Shelton’s.
BLVD is located on the south end of the Strip. Originally conceived in 2019, construction was delayed by COVID. New York-based Gindi Capital is developing the site which is expected to thrive with all the foot traffic in that area. The rental structure for retailers is based on frontage along the Strip. “It’s an opportunity to advertise your brand to millions of people every year,” said Manning. It’s a different approach to a leasing plan.
Major new platforms get a lot of headlines, but there’s retail interest and expansion beyond the biggest names.
“Some areas of Las Vegas have a lot of new projects coming online, started or approved in the last year or last 18 months,” said Clare. “Some have already opened, like UnCommons which is not full yet and is very high end. We see more projects off the Strip that have high-end restaurant coffee experiences that you see on the Strip. Now locals can enjoy that as well as visitors, even if they don’t want to be on the Strip.”
Northern Nevada is experiencing much of the same energy as both population and demand for retail increase.
“It’s a vibrant market right now, evidenced by the 3-point average vacancy rate,” said Shawn Smith, executive VP, managing director, Kidder Matthews. “I’ve been doing this for two decades and that’s the lowest I’ve ever seen it. Average rent is at the $2 per square foot mark, an average across the board at shopping centers and big box anchored centers. That’s the highest I’ve seen it as well in the market. Definitely a new high increase in average rent and very low vacancy, which means landlords are able to charge higher rents now because there’s less product out there.”
That’s partly because new construction is really slow. Commercial real estate construction costs are higher than residential, putting a damper on retail construction. Infill properties are in demand as it becomes harder to find new retail sites.
“That said, we’re still out there. There are still new projects,” said Smith. Retail in Reno is seeking not just infill sites but dominant corridors for traffic and shoppers. One recent center on the intersection of Keystone and I-80, is a high demand area with established trade. “They tore down the existing shopping center and then went ground up.” It now houses a Starbucks, Cracker Barrel, and Panera, among other national brands.
Still, northern Nevada isn’t seeing as many power centers and grocery-anchored centers as it used to. One of the last built was South Meadows Promenade with Sprouts Farmer’s Market, Marshalls, a salon, and a bank.
There’s a new power center proposed, Kiley Ranch Marketplace, poised to cover 47 acres at the corner of Wingfield Hills Road and Pyramid Highway. It will be the first power center developed in Sparks since 2005, with two 100,000-square-foot anchors.
On the tenant side of the equation there’s still activity. Big brands can open new locations if they can find the properties. Where growth may be slowing is with mom and pop or regional retailers. National brands can afford to build out space where regional retailers rely more on SBA loans or second mortgages to finance brick-and-mortar stores, with high interest rates. Add in high construction costs and a scarcity of sites, it’s hard for small businesses to launch. They need to look at second generation, existing space, and there’s not much available.
Leveling Out or Leveling Up
The pandemic wasn’t the first affront to in-store shopping. Online shopping spelled the end of brick and mortar the instant it took off, and the 2009 recession further shuttered stores nationwide. The Reno retail market has leveled out since COVID. “Other markets are seeing a slow turnaround, but Reno is a microcosm, a bubble, and seems to be doing very well on all engines, residential, commercial, etc. so it’s definitely leveled out here,” said Smith. Currently Reno’s market is seeing California migrations with new residents opening retail and restaurant franchises.
One holdover from COVID when lobbies were closed is the demand for drive throughs in retail and restaurants. Consumers learned the convenience during the pandemic and aren’t interested in giving it up. For retailers, drive-through properties require less staff. They’re faster and easier. “A lot more fast food drive through or QSR—quick service retail—restaurants are looking for drive throughs knowing they increase profitability,” said Smith.
“It hasn’t leveled out at all since COVID; it’s really ramped up,” said Clare. Along with low vacancy rates, tenants are easy to replace, landlords have more choices on getting better credit and personal guarantees, and need to make fewer concessions in order to fill properties.
The pandemic also led the charge to omnichannel retailing. Omnichannel, known as bricks and clicks in the UK, aligns online and offline shopping. The streamlined shopping experience includes everything from strolling the aisles to scrolling them for home delivery. Consumers can order online and pickup in store or have it delivered. They can check out the product in the store and order later for a better, online price and many variations thereof. Retailers are making it easier for consumers. The biggest casualty of the pivot to online sopping was out-of-date retail concepts.
“People still want to shop,” said Manning. They want to go physically and see what’s there, and what’s there is exploding with new concepts.
“The vacancy rate for retail properties has gone down fairly consistently over the last 12 quarters,” Clare said. “My personal opinion is I think it will level out pretty soon. I think it will certainly level out starting some time this year based on the geopolitical climate and the fact that rents are up higher than they’ve ever been. At some point, we make corrections.”
Rents have climbed steadily, 10 percent year over year to 2022 or ’23, then slowing, but rates are still as high as they’ve ever been in southern Nevada. “It’s more expensive now to rent space than it’s ever been and the market is as occupied as it has ever been in the last 15 years,” said Manning. “Retail is very healthy.”
A Variety of Retail Options
Probably the biggest challenge to leasing retail space in 2025 is finding it. More tenants are choosing to develop infill sites when they can’t find existing sites. There’s a lot of new construction, said Manning, but there aren’t a lot of big shopping centers being built. Developers are being selective where shopping centers are concerned. “Developers tend not to develop retail property unless there’s good pre-leasing or for a single tenant building already leased before construction starts, and that’s kept the retail market really strong. Twenty years ago you’d see shopping centers get built with very little leasing and try to lease it up after. That doesn’t happen very much anymore.”
Retail falls into a number of different categories. To start, there are regional malls or lifestyle centers. Regional tend to be indoor malls; lifestyle are outdoor, a ’90s trend that carried over into the early 2000s with a lot of attention paid to landscape ambience, a kind of Main Street USA feeling.
The next category is shopping malls that serve a wide area, maybe a 15-20-30-mile radius or larger for a regional mall that might service an entire metro area.
Next are power centers that might serve a 5-to-10 mile radius, a Target or Walmart anchored center, or big box center with a Home Depot, but not the same as an indoor shopping mall or lifestyle center. A power center can be anchored by several big box tenants. Consumers can drive right up to the storefront to park.
There are also neighborhood centers, generally properties anchored by grocery stores that serve a smaller area, maybe one to three miles. Those shopping centers have the “usual suspects,” Manning said—dry cleaners, banks, pizza shops, post office branches, hair salons—all the daily life amenities for a neighborhood.
Last are strip centers, convenience-oriented properties that front the street with typically between five and 10 tenants. They are typically easy in, easy out for consumers.
There are also freestanding buildings, like drugs stores, fast food outlets and the like. There are mixed-use properties, with shops and residential units or shops and office units, which are a niche product.
A handful of grocery stores novel to Nevada are coming online in the southern Nevada market, including Aldi and the Korean H Mart chain. There are some new shopping centers, like The Bend at Sunset and Durango, a trending growth area. Ashley Furniture opened a 257,000-square-foot superstore. Whole Foods built a new store in Summerlin. But retail development is still really low compared to what it was 20 years ago, another reason vacancy rates are so low.
The bumpy start to 2025 in general hasn’t left retail unfazed. People are paying attention to what’s happening with policies out of Washington. There’s concern about how tariffs will affect consumers and retailers alike, but so far that hasn’t shown up, Consumers are slowing spending a little, inflation still has a calming affect on wallets, but retail is holding steady.
It’s All About the Experience
If consumers are getting offline and heading to brick-and-mortar stores in 2025, they’re often looking for an experience.
Not every shopping experience is Area 15, billed as an immersive entertainment and events district. But retail centers are offering escape rooms, Topgolf and PopStroke venues, and top-of-the-line restaurant experiences alongside fast food. Announced in 2025, the flagship Museum of Ice Cream Las Vegas is set to open nearly 30,000-square-feet of immersive entertainment including an ice cream buffet, wedding chapel, and hotel suites.
Younger generations visiting Nevada are gambling less and heading outdoors more. When shopping, they’re looking for unique experiences. They’re going to shows and special events, and they are still spending money shopping.
“They really are experience-driven, and that bodes really well for retailers gravitating toward experiential–type retail,” said Manning. “It’s more than just a place to sell a product. It’s a place somebody wants to take a picture in front of and post to social media. There’s more thought in designing [retail] buildings and the land of the building, the restaurant space—restaurants today are works of art.”
Retail is a huge economic driver for Nevada. Retail ranks third in employing Nevadans after accommodation and food services, and transportation and warehousing, employing 249,043 people.
“Retail doesn’t look the same as it looked even 10 years ago,” said Clare. “There’s more interactive entertainment, family centers have activities, and you’re seeing more of that going in. We’re also seeing medical go into some retail centers, urgent care and the like and more veterinarian services. Dentists are going into shopping centers and other markets that wasn’t the traditional location for them even 10 years ago.”
“Retail is in a really good space, especially considering what people were talking about 10 years go,” said Manning. “Retailers are believers that people are still going to want to come to stores. People are still going to want to have that tangible experience, but it’s turned out even better than the best projections, the food and beverage and retail options out there are incredible. It’s a great evolution for retail over the last 10 years.”
