Start Your Engines
NAIOP Southern Nevada’s Bus Tour Committee is proud to present the 2023 “Race For Space” Bus Tour. These past few years have certainly sped by! Despite the fact that there is a bit of uncertainty in the debt markets, Las Vegas has seen record levels of demand in all asset classes, and it doesn’t seem like investors, tenants, or developers are letting off the gas just yet.
We are proud to report that commercial real estate development continues to reach new heights and with Las Vegas becoming one of the hottest destinations in sports, we don’t see this demand slowing down in the foreseeable future. On the tenant demand side, we are seeing a never-ending Race For Space due to the record low vacancy levels and record high demand. The continued success of Las Vegas is only heightened by developers working closely with our chapter’s architects, engineers, contractors, brokers and other consultants and service providers to realize market opportunities. These combined efforts will continue to play an important role in recruiting new businesses and jobs to Southern Nevada, supporting the sustainability and will allow us to continue to diversify our local economy.
We are ecstatic to present the 66 industrial, office, and retail projects on our tour this year that have been completed recently or are actively under construction. The Bus Tour Committee’s goal for this event is to showcase these exciting new developments for our members and generate awareness about the viability of new developments in the Las Vegas market. We sincerely thank the NAIOP Board of Directors, the Bus Tour Committee members, and all of the NAIOP member sponsors and advertisers who make this event possible. Without your time, efforts, and resources, we would not be able to put on such an important event.
Welcome to the NAIOP Southern Nevada 2023 “Race For Space” Bus Tour and thank you for your attendance as we celebrate the next chapter in Southern Nevada’s development.
West Submarket: Office
By: Mike Zaher, CBRE
Comprised of roughly 7 million SF of office product, the West Las Vegas Submarket is situated west of I-15, with Tropicana Ave. as the southern boundary and Charleston Blvd. as the northern boundary. Through the second quarter of 2023, the West Submarket experienced positive net absorption in both Q1 and Q2 totaling more than 158,000 SF.
Vacancies in the submarket tend to be among the lowest in the Las Vegas metropolitan statistical area (MSA) and, as of Q2 2023, had a direct vacancy rate of 6.9%, which is the lowest in the Valley. Research reports a total vacancy rate of 11.1% Valley-wide when considering office product range in 10,000 SF and above. Historically, the West Submarket has outperformed other Las Vegas submarkets; however, with the recent growth of the Southwest Submarket along the 215 Curve, this trend has begun to shift to the Southwest Submarket.
Within the heart of the West Submarket is the 400-acre mixed-use development of Downtown Summerlin, which includes an office component comprised of multiple Class A, LEED Certified, office buildings. The latest completion, 1700 Pavilion, started seeing new tenants take occupancy earlier this year. Adjacent to the Las Vegas Ballpark, the 10-story office building, is a true Class A project, and is currently 65% leased with another 26.51% in negotiations. With the success of the three office buildings Howard Hughes Corporation has built so far, coupled with the success of Downtown Summerlin, the next project (located at 3950 Azimuth Point Drive) has shifted further south, and will consist of two 3-story professional office buildings, at approximately 73,738 SF each (totaling 147,476 SF).
Southwest Submarket: Office
By: Tonya Gottesman, MDL Group
The Southwest Submarket is the second largest submarket in the Las Vegas Valley. Currently the submarket accounts for about 18% of the total office square footage in the Valley with over 180,000 SF under construction; 282,000 SF was delivered at the end of Q4 2022.
The Southwest Submarket is a sought-after location for office users as it has high quality product and a desirable midpoint for both Summerlin and Henderson residents. In fact, now many consider it to be the center of town from an office perspective. As the center of the office world has shifted to the southwest, the submarket has delivered for lease office projects such as Narrative, UnCommons, Axiom and Evora and new for sale office condos, such as the 215 West.
There is currently 180,000 SF under construction. Net absorption so far this year is 132,297 SF, which is 41% of overall absorption for the Valley. The lease rates within the submarket reflect that it is the premium location within the Valley with an average lease rate of $3.00 PSF FSG, which is also the highest lease rate across the Valley with $2.50 PSF FSG being the average lease rate.
Both vacancy rate and lease rates within the submarket have remained relatively steady since the beginning of 2023 and sublease space is almost non-existent at 1.3%. Overall, the submarket shows continued rent growth with an increase of 9% over the past year. Owner/User sales continue to be strong with sold comparables as high as $575 per SF for second generation space and $330 per SF for new grey shell construction. With accessibility via the I-215, overall availability remains well below the Valley average.
Southwest Submarket: Industrial
By: Kelsey Higgins, CBRE
the Southwest Submarket is currently comprised of approximately 46 million SF of industrial product according to the latest figures from Q2 2023. Over 3 million SF of space in the pipeline is expected to be built within the submarket in the next few years. As there is around a 2.7% vacancy, asking rates remain strong with research noting $1.20 as an average achieved rate during the quarter. Smaller flex spaces remain sparse within the area, rates are being achieved between $1.40 – $1.50 PSF NNN for second generation space as well as new construction with little pricing differential between the two.
Since the pandemic, the lease rates have remained strong within the market. Larger big box spaces are asking $1.15 to $1.25 PSF for new construction dock high. Concessions remain to be very sparse, landlords are giving between 1-2 months of abated rent, but not much more. Pricing within the for-sale market in the Southwest varies. Deals range between $270 PSF and $330 PSF with varying factors such as size, quality of product and location.
The premium of pricing in the Southwest Submarket is not expected to decline any time soon, as the proximity to both the Las Vegas Strip and Harry Reid International Airport are large drivers to pricing spaces. As there is minimal infill land that has not already been purchased within the Southwest Submarket, it is expected to maintain its foothold.
Henderson Submarket: Industrial/West Henderson
By: Morgan Elson, Colliers
Consisting of just under 5.7 million SF, the West Henderson Industrial Submarket is unlike many of the other submarkets in that it has direct access to the California border via the I-15 and also has close proximity to Harry Reid International Airport and the Las Vegas Strip. West Henderson has grown exponentially over the past couple years, starting with a single industrial building (Levi Strauss 638,365 SF) to just under 5.7 million SF total in a short period of time. Vacancy currently sits at 0% with no standing inventory available.
As of Q2 2023, West Henderson has experienced no net absorption, but has 1.4 million SF under construction with approximately 5.5 million SF planned. Of the 1.4 million SF under construction, 883,522 SF is scheduled to deliver by Q4 2023 (67% of which is pre-leased). The remaining 552,963 SF is scheduled to deliver by Q1 2024 (23% is currently pre-leased).
Through the second quarter of 2023, West Henderson has delivered no new inventory but plans to deliver 883,000 SF by year’s end. New projects to the area include Dermody’s LogistiCenter at I-15 South (four buildings totaling 1,050,420 SF), EBS Realty Partner’s Henderson Gateway Industrial Facility (single freestanding building totaling 98,023 SF) and Overton Moore’s Southern Gateway at Sloan (single freestanding building totaling 159,362 SF).
Despite the fact that West Henderson is a “new” submarket, the region is nearly entirely spoken for with very few sites available for new industrial development. Until the City of Henderson agrees to release additional industrial sites, new projects aren’t expected to be added to the pipeline in the unforeseeable future.
Henderson Submarket: Office
By: Megan McInerney, Colliers
the Henderson Office Submarket consists of 5.5 million SF across 281 buildings. The majority is Class B and C product with only eight Class A buildings totaling 583,668 SF. Q2 2023 saw a 12% vacancy rate, up from 11.2% in Q1, with an average asking rate of $2.52 PSF, similar to last year’s $2.51 PSF.
Much of the growth and development of Henderson is in West Henderson, where the office submarket is following new retail and housing developments. Notable projects under construction include Valley Health Systems’ West Henderson Hospital. The project is on track for a Q4 2024 delivery. The Park at Horizon Ridge is a six-building owner-user project that delivered shell and core in Q2. These owner-user buildings are selling at over $300 PSF shell. An additional 75,000 square feet of owner-user condos on Seven Hills Drive will deliver in Q1 2024. These condos are witnessing strong activity, with an asking price of $325 to $350 PSF for shell delivery. The Village at St. Rose is a mixed-use development that will feature 160,000 SF of office completed over two phases. This project broke ground in July and is on track for a Q4 2024 delivery. Optum Health leased 80,000 SF in the first phase.
Notable lease transactions include Hera Health leasing 7,500 SF at 880 Seven Hills Dr., Jogan Health leasing 12,550 SF at 2360 Corporate Circle and Alliance North America leasing 12,087 SF at 1740 Raiders Way. Kingsbarn Capital acquired a three-building portfolio in Green Valley for $114.5M (347,000 SF) or $330 PSF.
Henderson’s allure lies in its convenient 215 Beltway access, proximity to amenities and the master-planned communities of Green Valley, Seven Hills, Anthem, MacDonald Highlands, Inspirada and Cadence.
Henderson Submarket: Industrial
By: Paul Sweetland, SIOR Colliers
the Henderson Submarket surrounds the I-215 and US 95 freeway intersection. There is approximately 14.5 million SF of existing inventory and roughly 2.06 million SF under construction with 5.5 million SF expected to break ground in the near future. The majority of the submarket has immediate access to the I-215 and US 95 freeway interchange. With the recent expansion of development into the Eldorado Valley, which is 9 miles southeast of the interchange, the submarket will continue to see further growth with a mix of local and regional tenants.
Vacancy currently sits at 1%, a significant decrease from the 1.5% vacancy rate recorded in the Q1 2023. Henderson saw 66,608 SF of positive net absorption in Q2 2023. Due to a lack of available product in the Henderson Submarket, there have been a limited number of new deals recently signed. Deals that are getting across the finish line include a 44,800 SF renewal at Nuveen’s Henderson 215 project and a 29,250 SF renewal at Prologis‘ Henderson Distribution Center (formerly owned by Link Logistics). Through the second quarter of 2023, East Henderson hasn’t seen any new product completed but has 179,021 SF scheduled to deliver in the third quarter of 2023 (51% of which is already preleased) with 405,675 SF scheduled to deliver by year’s end.
With land availability scarce in the Henderson Submarket, very few new planned projects are expected to be added to the pipeline. However, with 2.06 million SF under construction and 5.5 million SF planned, there will be plenty of opportunities available for tenants to continue to operate out of the affluent and well-established Henderson Submarket.
Downtown/Central/Airport Submarket: Industrial
By: Danny Leanos JLL
The Downtown/Central/Airport Submarket is the fourth largest submarket in Las Vegas consisting of approximately 15.8 million SF. The area has been a preferred choice for occupiers that have clients flying in often and need to be located near the Las Vegas Strip. With convenient access to the I-15 & I-215 highways and many nearby amenities, occupiers have absorbed 95,214 SF. The average lease rate through Q2 has been $1.19 PSF NNN.
Landlords continue to push on lease rates in this submarket. Small bay to mid-bay product (5,000 to 40,000 SF) have been commanding rents between $1.35 and $1.45 SF NNN. Flex products are achieving even higher rates, ranging from $1.50 to $1.60 SF NNN. Larger spaces of 75,000 SF or more have achieved rates in the range of $1.10 to $1.15 NNN.
Developer WG Group is expected to break ground in October on a 40,346 rear loaded building. Notably, earlier this year the Compass Logistics Center was completed with a 150,120 SF cross-dock building. The developer, Hopewell Development in partnership with Nicola Wealth Advisors, secured a lease for half of the building, achieving a rental rate above $1.10 PSF NNN.
The demand for investment opportunities in the Las Vegas market remains robust; however, there was a lack of trades in the Downtown/Central/Airport Submarket due to limited inventory. One notable transaction in 2023 was the sale of 7000 Placid St., a 309,208 SF building occupied by Foliot Furniture as part of a portfolio. Prologis acquired the property at a 4% cap rate. The area will continue to face limitations for future development due to a shortage of available land sites.
Downtown/Central/Airport Submarket: Office
The Downtown/Central/Airport Submarket consist of roughly 12 million SF of office space. Central continues to lead the market in vacancy at 22%, with Downtown showing 15.5% and the Airport showing 11.6% vacancy.
Downtown continues to follow historical trends with primarily government and legal sector-related tenants. The most significant sales transaction Downtown was City Centre Place at 400 S. 4th Street. The 109,000 SF Class-A building traded in February for $15.25 million or $140 PSF. The building at the time of sale was 36% occupied. Downtown is seeing one of the few adaptive reuses of office space in Las Vegas. Dapper Companies is in the process of revitalizing 201 S. Las Vegas Blvd. The 31,500 SF building will be home to the US Post Office and Woven Workspaces. The City of Las Vegas will be breaking ground on their Civic Center and Plaza which will deliver over 250,000 SF of office, retail and community focused spaces over three phases with initial deliveries in 2025.
The biggest news in the central region was EQ Office/Blackstone’s announcement in March to place their 1.5 million SF corporate campus, The HC, into special servicing. As the market waits to see what unfolds with the project, approximately 250,000 SF of tenants could potentially relocate through the end of 2024.
The Airport Submarket continues to perform well due to the planned purchase of 800,000 SF by the State of Nevada. The 20 building Thomas & Mack project Is a multi-year acquisition that Governor Lombardo spoke about during his visit at NAIOP’s October Breakfast Meeting. The first acquisition of six buildings was completed in July for a total of 293,000 SF. As the state phases their move to McCarran Center, they will be vacating multiple buildings across the Las Vegas Valley.
APEX Submarket: Industrial
By: Sean Zaher, SIOR CBRE
Apex is located at the northernmost portion of the North Las Vegas Submarket and will house the next wave of industrial development for the Las Vegas Valley. It is situated along Interstate 15 starting north of the Las Vegas Speedway and stretching to the US Highway 93. The Apex Industrial Park consists of approximately 7,000 acres (3,500 acres of flat/developable land) which will be able to accommodate nearly 55 million SF of industrial growth once fully built out.
The area is seeing a tremendous amount of activity in this past year as infrastructure makes its way from the southern portion of the park and pushing north. Over the next several years this infrastructure expansion will continue to northern Apex near the US 93, allowing increased development opportunities. This has been made possible with spending by local municipalities as well as public/private partnerships with the City of North Las Vegas and the Southern Nevada Water Authority.
There are currently several developments underway within the southern and central portion of Apex with more to follow. There is approximately 5.5 million SF of development underway with another 9.5 million SF planned. Current users/tenants that have already committed to locating to this area include Kroger, Air Liquide, Hey Dude (Crocs), Saddle Creek Logistics, Carmax and Operating Engineers.
The primary product type being constructed in Apex is bulk distribution with sizes of 200,000 SF up to 2 million SF. Rates in this area can range from $0.75 to $0.90 PSF NNN depending on the size. Due to limited land availability within the Las Vegas Valley, future industrial growth in Apex will be seen for years to come.
North Las Vegas Submarket: Industrial
By: Zac Zaher, Newmark
The North Las Vegas Submarket is the largest submarket in the greater Las Vegas Valley consisting of roughly 67 million SF or 42% of the overall market and 65% of the distribution product type in Las Vegas. Southern Nevada, specifically North Las Vegas, remains one of the most active markets for e-commerce/logistics in the southwest region due to its proximity to southern California ports, lower occupancy costs and quality labor pool.
North Las Vegas ended 2022 at a 1% vacancy rate with 4.4 million SF in net absorption (60% of the market’s overall absorption). As of Q2 2023, the vacancy rate sits at 1.3% with 3.2 million SF of net absorption YTD (66% of the market’s overall absorption). The significant rent growth the market has seen over the past few years is being tempered by shifting demand and a record amount of supply under construction.
The estimated rate for mid-bay (5,000 to 20,000 SF) is in the $1.15 to $1.20 PSF range; for light industrial (20,000 to 100,000 SF) it’s in the $1.00 to $1.15 PSF range; and distribution (100,000 SF and above) ranges from $0.85 to $1.00 PSF.
In terms of new construction, North Las Vegas has 15 million SF under construction, which makes up 79% of the total under construction pipeline within the Valley. There is an additional 9.6 million SF in the planned pipeline which is 50% of the total planned projects within the Valley. Of the total under construction within North Las Vegas, 25% is preleased as of Q2 2023.
The current Interest rate environment has had a significant impact on land values. Over the last 12 months within North Las Vegas, land pricing has moved from $25 to $30 plus PSF to $20 to $25.
Northwest Submarket: Office
By: Mike Tabeek, SIOR, CCIM, Newmark
The Northwest Submarket is encompassed by the 215 Beltway to the west, east along US-95 and Rancho Dr., Charleston to the south and everything north in between those boundaries. As of Q2 2023, this market consists of nearly 6 million SF of office space, which represents 15% of the total office space tracked in the Las Vegas Valley. The second quarter shows a 15.6% vacancy rate in this submarket, up from 12.7% this time last year. This has to do with 100,000 SF of sublease space that Asurion has on the market, and other projects like Cheyenne Corporate Center that carries a large vacancy.
Leasing rates in the northwest currently average $2.18 PSF FSG, and $2.50 on Class A office space and have increased since last year. As the market has gotten tighter in the Class A space and the “flight to quality” continues, rents are increasing on trophy properties.
The office market was strong in the first half 2022 and leasing has returned to a normal pace into 2023 as uncertainty leads to a leveling off. With that said the market remains healthy and deals are still getting done, it’s just taking longer to get them over the finish line. Occupiers are being more thoughtful in their approach when it comes to leasing office space as construction cost continue to rise. Tenants are having to make the decision of whether or not to contribute more cash out of pocket for tenant improvements. Activity has picked back up. There are several projects planned in the Valley and Las Vegas needs new office product.
Retail Zoom
Hot Spots
By: Jennifer Ott, CCIM CBRE
The Southwest Submarket continues to be a hot spot for retailers and developers. As of Q2 2023, there was a vacancy rate of 3.4% and approximately 260,000 SF of retail under construction, representing a 2.1% expansion in inventory, with approximately 380,000 SF built and delivered in the past 12 months.
The Durango/Sunset Curve along the southern Beltway, is once again a sweet spot with new development and innovative projects like Durango Station, UnCommons and The Bend. With exciting new tenants coming to the submarket, such as Lifetime Fitness and Electric Pickle, as well as the new food hall concept, The Sundry, the Durango Sunset curve is predicted to remain a popular target for retailers for years to come. Lease rates are reflecting the low vacancy and high demand with new construction rates ranging from $36 to $66+ PSF in this area.
The Blue Diamond corridor of the Southwest Submarket is another hot spot that has experienced significant change and growth over the past year as the population has continued to grow in this area. The activity on Blue Diamond Road from I-15 to Mountains Edge has seen vacant parcels disappearing for new retail centers and freestanding pad development. New tenants to the area include Grocery Outlet, Salad and Go and Café Zupas. New construction shows increased lease rates ranging from $36 to $54 PSF with existing retail leasing in the $24 to $45 PSF range in as-is condition.
Retail Pads
By: Areeba Moten, Colliers
The introduction of new retailers in the market, lack of quality product, and the current state of the economy are factors that are keeping retail pads a highly sought after product type. These factors are keeping vacancy rates for freestanding retail at an all-time low since the Great Recession, currently at 1.6%. Convenience continues to drive consumers which, in turn, is driving retailers to secure pads on hard corner intersections with easy access, high visibility and, in most instances, the ability to have a drive thru. Las Vegas continues to have land constraints resulting in limited inventory of Class A pad sites, which has driven rents upward by 10% in the 12 months.
Post-COVID, retailers have prioritized location with ground lease rents around $150,000- to $250,000, and build-to-suit rents around $175,000- to $300,000. An “A” pad site is considered one within a power center anchored with box/grocer “daily needs”, high density, strong visibility, high traffic counts and ease of access. Retailers are also leaning on AI with app phone tracking technologies to help secure new stores and reposition existing stores.
Retail STNL (single triple net leased) investments remain the most active in retail. Typically, these assets are acquired cash so, despite increasing interest rates, STNL Q2 2023 sales volume was $81.5 million, encompassing 20 sales and an average sale price of $511.57 PSF. The average cap-rate of STNL compressed by 10% year-over-year. In Q2 2023, the average cap rate for STNL retail is 4.9%, compared to 5.4% in 2022. However, outside of STNL retail, along with other asset classes, there has been a decrease in sales volume by about 75% from the prior year.
The future for retail pads looks promising and continued growth in this sector is expected as retailers, investors and developers continue to put this category of retail at the top of their list.
Restaurants and QSR
By: Lauren Tabeek, Newmark
Activity in the restaurant and QSR (quick service restaurant) categories has been a driving force behind retail leasing in the Las Vegas market for several years. Existing brands expanding and new brands entering the market continue to drive demand for high visibility pad space, drive thru opportunities and second-generation restaurant spaces. Retail absorption has only declined in Q2 due to less available space on the market. Currently there are all-time high rents on these types of spaces fueled by demand and a lack of available product. End-cap pad spaces are going for $2.65 to $4.00 PSF per month and drive-thru opportunities for $3.50 to $5.00 PSF per month.
Some of the newer brands to enter the market include Norm’s Diner, Zippy’s, Whataburger, Salt & Straw, Snooze, Randy’s Donuts, PowerSoul Café and various chicken concepts like Dave’s Hot Chicken, Bojangles and so many more.
The restaurant concepts continue to morph and adapt. Some brands are downsizing and strategically adding drive thrus to bolster sales in a post-pandemic world. However, the big push has been towards “pick up” lanes. These lanes are geared towards customers utilizing “app” ordering and are just there to pick it up. Chipotle has gone as far as to trademark theirs as the “ChipotlaneTM”. Other trends in Las Vegas are food halls, such as The Sundry located at UnCommons in the Southwest Submarket. Food halls have become a great amenity to help attract office tenants and keep employees happy by eliminating the need to hop in the car and drive to lunch. Restaurants and QSRs are expected to continue to keep demand steady as long as key economic drivers remain in place for the Las Vegas market.
Resort Corridor
By: Dylan Heroy, Cushman & Wakefield
Nevada’s casinos brought in a record $1.4 billion in July, extending the state’s streak of monthly gaming revenue surpassing $1 billion to 29 consecutive months. Harry Reid International Airport saw more than 4.94 million passengers in July, its third busiest month on record.
Formula 1 is coming to The Strip in November and the inaugural Las Vegas Grand Prix is expected to be one of the biggest events in the world. The race is expected to inject an estimated $1.2 billion into the Las Vegas economy in the first year. A few months later, in February 2024, Allegiant Stadium with host Super Bowl LVIII which is expected to generate an estimated total economic impact of more than $500 million.
The Sphere, a $2.3 billion, 17,500 seat venue opened to the public this year and is expected to redefine immersive experiences. Just up the street, the highly anticipated and long-awaited Fontainebleau is set to open its doors in December 2023. The 67-story resort will have 3,644 hotel rooms and suites, 550,000 SF of meeting space, 150,000 SF of casino space and over 90,000 SF of high-end retail space.
Competitive socializing venues are becoming increasingly popular, offering a unique blend of entertainment, friendly competition and social interaction. Golf enthusiasts have plenty to look forward to, with a multitude of new projects coming to The Strip. For those who have embraced the pickleball craze, there are two venues on the horizon for the Las Vegas Valley. Electric Pickle at The Bend, scheduled to open in Spring 2024 and Chicken N Pickle, located in Henderson at St. Rose and Maryland Parkway. Across the I-15, the AREA15 District is in the midst of a massive expansion adding 413,000 SF of immersive, experiential retail space across 20 acres, anchored by the 110,000 SF Universal Parks & Resorts’ year-round horror experience.
NAIOP Mission Statement
NAIOP, the Commercial Real Estate Development Association, is the leading organization for developers, owners and related professionals in office, industrial, retail and mixed-use real estate. NAIOP Southern Nevada provides unparalleled industry networking and education, and advocates for effective legislation and regulations on behalf of owners and developers of commercial real estate. NAIOP Southern Nevada advances responsible, sustainable development that creates jobs and benefits the southern Nevada community and the economy in which our members work and live.
About NAIOP
Commercial Real Estate Development Association
Southern Nevada Chapter
NAIOP, the Commercial Real Estate Development Association, comprises 20,000 members in North America. NAIOP advances responsible commercial real estate development and advocates for effective public policy.
Formed in 1986, the NAIOP Southern Nevada chapter has grown dramatically since it’s inception as a socially oriented club to become the voice of commercial real estate development in southern Nevada.
With 700 members, the chapter is known throughout the community for organizing special events such as the awards program, annual bus tour of office, retail and industrial projects, annual golf tournament, monthly breakfast meetings featuring informative guest speakers and numerous education workshops and seminars. The chapter is also actively involved in government affairs at the local and state levels.
NAIOP Southern Nevada has received national recognition over the years winning Chapter Merit Awards for its Spotlight Awards program, educational Programs, membership, government affairs, volunteerism, community service projects, Developing Leaders Institute, Outstanding Contribution by a Chapter President and Outstanding Contribution by a Chapter Executive.
