When earthshaking events occur, there’s often consensus that nothing will ever be the same. Followed often by everything being pretty much the same. But COVID caused a monumental shift in everything, including commercial real estate, and the effects still resonate. Back when the lockdown hit, companies scrambled to stay afloat, some changing how they did business, others changing what business they did.
“COVID was truly a monumental shift of our market,” said Neil Sansone, president Real Estate Investment & Development, Sansone Companies. “E-commerce surged because everybody was buying from home and all of a sudden people realized maybe their businesses were not as necessary or they had to find different ways to make money. Small businesses became streamlined. In the office market, if people didn’t need space, they got rid of it or repositioned, and people who did need space repositioned into better amenities, better locations.”
When employees couldn’t go into the office even if they wanted to, business owners had to decide whether to keep office space leased but unused or move completely to remote work.
Office Market 2025
Fast forward to 2025. Nevada’s office market has rebounded. It’s stable. It’s just not particularly exciting.
“Our northern Nevada office market is stable,” said Dominic Brunetti, principal, Dickson Commercial Group. “It rebounded quickly after COVID, based on the influx of primarily Californians that came here. Some brought their small businesses, and some didn’t, but some relocated here and then didn’t want to work strictly from home and leased small offices.”
There was also an influx of investors that flooded the market and drove values extremely high, almost out of reach and out of control, added Brunetti. “But that’s all somewhat settled down and now we’re kicking around a 10 percent vacancy rate over the last few years.”
In southern Nevada the market has shifted to an emphasis on owning versus leasing. “We’ve seen ownership become more favorable based on some different SBA [Small Business Administration] opportunities, but demand for these buildings is very high and the inventory is very low, so it’s caused prices to skyrocket,” said Megan McInerney, associate vice president, Colliers Las Vegas. Even with higher prices, owning is now more favorable in light of the cost of tenant improvements.
In addition, developers have taken many planned projects off the table. There’s low vacancy, there’s space available, there’s still a lot of remote and hybrid work, so companies don’t need to expand their space or utilize every inch. Basically, the market is seeing slow and steady growth.
It’s a stable market, just not explosive. “It’s not very exciting right now. There aren’t a lot of big moves happening. There are no new developments on the table which, prior to COVID, there were a few class A really nice mixed-use office and retail developments planned and those just never came to fruition,” said Brunetti.
Work From… Wherever?
Like other major markets affected by COVID, Nevada saw the rise of shadow space: offices that were leased but no one was using. Companies weren’t defaulting on leases. They weren’t even necessarily moving out of their spaces.
“But no one was going into the office, of course, so depending on how you wanted to calculate your vacancy versus the actual utilization of office space, it was upwards of over 20 percent [vacancy rate],” said Brunetti. Shadow space was leased space, but if nobody ever went back to that office it could suddenly be back on the market. It made the market more uncertain and volatile.
When it was possible to return to offices, the state of Nevada under Governor Lombardo’s leadership began moving State offices into buildings not necessarily clustered together as government complexes and not currently owned by the state. Nevada’s government has leased upwards of 150,000-square-feet of office space since the 2023 legislative session, helping shore up vacancy rates. State government is currently looking to buy various office properties, like a Las Vegas office park located near Harry Reid International Airport.
“They wanted to bring state employees back to the workplace and [Governor Lombardo] wanted to do that providing energetic class A modernized work environments for employees,” said Brunetti. “In 2024 and part of 2025, our most active tenant in the market in our entire state was the State of Nevada.”
Trends in Today’s Office Market
“There have been two trends that come to mind that have taken shape over the last couple of years,” said McInerney. “First from a leasing perspective is spec suites. A lot of owners who have gone ahead and built out spec suites, taking up that upfront cost, are having a lot of success with them.”
That makes sense. Spec suites are move-in ready suites the owner or developer builds and designs so tenants just move in and start working. “The most successes I’ve seen are from 1200- to 3500-square-feet,” said McInerney. “Anything bigger than that the tenants have more of a preference of how it’s designed and laid out.”
Spec suites generally build out a mix of private offices and open space like break areas, reception and conference rooms. They’re built efficiently and use high-end finishes.
“The key to them from an ownership perspective is not to design them too high-end but still pull in a lot of high-end components like natural light and glass, that sort of thing, just to be sure you can still achieve a lease rate that makes them pencil out,” said McInerney. Repositioning larger suites as smaller spaces is also a successful trend. Turning a 20,000-square-foot building into four 5000-square-foot units attracts small businesses and short-term users.
Coworking office spaces also appeal to short-term users. New coworking developments in Southern Nevada are performing very well. “They do well for people who are new to the market and seeking shorter term deals with some flexibility,” said McInerney. Companies with longer term needs likely have more tailored ideas for their space, but coworking spaces can bridge the gap between move-in ready offices and more permanent solutions.
Similarly, office building conversions into office condos is popular. “If an investor is able to purchase a building with high vacancy at a decent price and then put a condo map on it, especially if it’s in a desirable location, they are able to turn around and sell those for a premium,” said McInerney.
Investors and landlords will purchase a vacant building and convert it into common areas and user owned office suites. Tenants are looking for that ownership component because tenant improvement pricing is so high, McInerney said. “So ownership has become much more favorable if they’re able to buy them within the 3- to 7000-square-foot range which is the prime target for an office condo.”
It’s a newer concept that makes use of existing buildings, often in areas where there isn’t much new development like Summerlin, but there have also been developers who built shell buildings for the purpose of turning them into office condos.
One possibly unexpected trend is a rise in pseudo-medical use, licensed procedures like injectables, Botox, redlight treatments, eyebrow threading procedures—a combination of aesthetic and medical treatments. The growing popularity of such wellness practices is leading to expansion of solo practitioner shops to groups with 30 or 40 practitioners offering multiple procedures. “We’re seeing them come more into office space as retail rates get higher, and as it gets a little more palatable for them to open a business within an office,” said Sansone.
What Office Users Want, and Where They Want It
Flight to quality remains a leading trend. There’s not a lot of new construction of office space in Nevada, so companies are choosing existing buildings with the best amenities and location. They’re looking for initiatives for cyclists, commuting programs, parking space. They’re also looking for doggy day care, gym access, food choices, and access to services employees need for life beyond work. Some landlords are more open to bring your dog to work space, making going to work more palatable.
There aren’t many new developments currently planned for Northern Nevada, but medical offices are going strong. The Sierra Medical Center building on Longley near the new Universal Health Services hospital leased up successfully as the healthcare market continues to grow. New medical offices tend to cluster around hospital facilities. Kaiser Permanente plans to enter the northern Nevada market in 2026, occupying space in submarkets including Spanish Springs, downtown and central Reno, and South Reno, and should spur office growth in those areas.
Office users in similar industries still gravitate to specific locations. Law firms gather near courthouses, medical offices near hospitals. But remote work is even changing that. With virtual hearings now acceptable, law firms don’t always have to be near the courthouse, and staff doesn’t always have to be in the office.
When companies relocate it’s often to areas with more density. “For example, Summerlin has built a lot of product around downtown, and people are leaving what I call B or C locations, maybe further away, not as many amenities, not as nice an area or harder to get to,” said Sansone. “They gravitate toward easier to get to areas, closer to freeways, closer to amenities.”
With the market shift post-COVID, Sansone has seen a moderate increase in flex space to what’s called a hotel model, where companies would normally need 5000-square-feet for all their employees, but instead lease only 3000-square-feet because employees only need to be in the office two or three days a week and they’re shifting to sharing offices.
“Companies have become more efficient and decreased their square footage footprint and still employ the same number of people. It’s a good thing overall for the market to find that fit where employees still wanted to come back to the office but were afforded the flexibility to maybe not have to be there 9 to 5 Monday through Friday,” said Brunetti.
Las Vegas didn’t see a lot of pandemic-caused remote work; the office market wasn’t hit as hard as a lot of other cities nationwide. There was some downsizing or rightsizing during lockdown, and post-COVID hybrid office work is becoming the norm. “I’m not really seeing many companies making huge shifts and needing different space sizes most recently,” said McInerney.
Southern Nevada doesn’t have a lot of new office developments planned. There are a couple speculative developments proposed—Howard Hughes Holdings is considering adding a building next to its 1700 Pavilion nearly 266,000-square-foot class A office building in Summerlin. Between Summerlin and Henderson, UnCommons is talking about building their last office building, and a third developer is planning a multi-story building in the Southwest. All of the projects are based on current demand and there are a lot of larger tenants in the market looking for space, said McInerney, so the projects should be successful. “But all of these projects will rely on pre-leasing activity, so it will just be interesting to see with larger users that are kind of poking around to see where they end up. All of those projects are in prime locations.”
Location is another consideration. In southern Nevada anything in close proximity to the 215 Beltway is very desirable, and specifically in the southwest corridor, where businesses can draw talent from both Summerlin and Henderson.
In northern Nevada, South Reno is a convenient submarket because of high residential numbers; it’s near executive housing, making the area a good choice for offices. Spanish Springs is a bit more suburban and neighborhood friendly, Brunetti said—that’s where there’s more one-story, garden office buildings housing service-oriented companies wanting to serve those neighborhoods.
“We’re calling this the new normal, where we’ve been the last 12 to 24 months,” said Brunetti. “We’re going to be right at 10 percent more or less vacancy, we’re going to have hybrid work environments that employers are providing for employees. We are very much in a stable environment right now and it will be interesting to see if we stay stable from a standpoint of occupancy and vacancy,” said Brunetti. “The number one impediment from anyone in [constructing] a new building in northern Nevada, a class A office building, is cost.”
COVID drove up construction prices and those costs – materials, shipping, logistics, workforce – haven’t come down. “We’re all waiting to see what costs will do in order to hopefully spur another wave of new development in the office sector. It hasn’t slowed down the industrial markets as much, like warehousing and distribution, etc., but from an office perspective it has been the number one impediment to future office buildings.”
For commercial real estate as a whole, Sansone said there’s an odd feeling in the air economically, a kind of hesitation from buyers and investors, possibly because national statistics and reports don’t always match Nevada’s market. When national reports on CRE markets are gloom and doom, existing and future tenants and landlords may not realize Nevada’s market is more stable.
“With new deals there’s a bit of hesitation,” said Sansone. ‘”Some people are very concerned or just don’t know what to do. They might want to wait and see. Other people see an opportunity to strike, ‘Hey, everybody on the sidelines, I’m going to make the deal today.'” Some people see current opportunities. Others see uncertainty and hesitate.
Overall, the market is doing well, Sansone said, at least on the landlord/tenant side. “On the financing side there’s some unease as to market, so for new development construction or refinancing, repositioning assets, there’s a bit of uncertainty for lenders and underwriting for developers right now, or CRE owners and investors. But overall when asked about the health of the market I always look to vacancies and delinquencies and right now and for the last however many months, we’re at something like 99 percent occupied. We have very few defaults or even late payments, and that always shows me it’s healthy. People are paying their bills.”
“Vegas remains pretty stable over the last two years,” said McInerney. “The owner/user market is faring really well. It’s not entirely back where it used to be but activity is strong. People are moving to Las Vegas. People are moving their companies to Las Vegas. People have confidence in it.”
