Northern Nevada
By Bob Shanahan, Colliers Reno
Reno’s office market closed 2024 with remarkable momentum. The uptick in activity we’ve observed is backed by the data and paints an optimistic outlook for 2025. With the market vacancy rate now below 10%, it is possible we could see a new construction project start in the months ahead to address space constraints for tenants searching for Class A amenitized space. Sales volume was well below 2021-2022 levels, but did increase 64.2% from 2023. Investors have largely remained on the sidelines; however, owner-users have been active acquiring properties across Reno throughout 2024. The $219 per square foot average sale price in 2024 posted a 9.1% decrease from 2023.
Nevada’s return-to-office efforts and subsequent leasing activity helped 2024’s net absorption increase to 93,586 square feet after recording occupancy losses of 22,801 square feet in 2023. The vacancy rate of 9.1% at year-end 2024 declined 157 basis points year-over-year while the availability rate of 9.7% fell 329 basis points year-over-year. Annual leasing activity of 788,468 square feet jumped 33.2% from 2023. With additional leased spaces to be occupied in early 2025 and no new supply underway, the market should see low vacancy rates and rising rental rates throughout much of 2025.
Southern Nevada
By John Stater, Colliers Las Vegas
After four consecutive quarters of increasing vacancy, southern Nevada’s office market vacancy decreased to 11.8% this quarter. No new office projects were completed this quarter, and net absorption rebounded to 126,238 square feet (SF), the market’s highest net absorption since the second quarter of 2023. The weighted average asking rental for office space increased to $2.68 psf on a full service gross (FSG) basis.
Through most of last year, and most of 2023, the office market was challenged by several macro trends. These included business migration within the Valley, government purchases of professional office buildings and a general reduction in the office workforce. Taken together, 2023 and 2024 posted only 133,120 SF of net absorption, much of that coming in the fourth quarter of 2024.
Based on fourth quarter performance, Southern Nevada’s office market will probably enter a recovery period in 2025. Of particular concern, though, was office employment growth, which remained very weak in the fourth quarter. Without job growth, demand for office space should remain restrained.
