Northern Nevada
By Gary Tremaine, Dickson Commercial Group
The first quarter of the year saw a significant increase in volume over Q4 2022, but most of the volume increase was due to the sale of the Summit Mall, acquired by Rhino Properties in South Meadows.
There was a decrease in sales in Q1 2023 compared to Q4 2022, but a decent increase in sales volume and average price per square foot (PSF). We are beginning to see both buyers and sellers come to grips with today’s cap rates, and appropriately priced centers are seeing demand as the market inventory is still low. The shift in buyer and seller expectations on cap rates is a big reason for the decrease in volume. On the owner-user side, increased borrowing costs are contributing to slower sales.
A Taco Bell in The Outlets at Legends sold for $3.9 million at a 5 percent cap rate. Also in Sparks, a 6,906 SF Applebees sold for $1.6 million or $226.65 PSF in the Ironhorse Shopping Center. In the Midtown area, the former Silver Peak Brewery sold for $1.5 million ($225.87 PSF). Also in Midtown, Brick’s restaurant and wine bar sold for $2.2 million ($336.49 PSF). In South Reno, the Summit Shopping Mall highlighted the retail sales market for Q1 2023. The property sold for $75.9 million ($688.24 PSF), with a cap rate at time of sale of 7.8 percent.
Southern Nevada
By Liz Clare, Avison Young, – Las Vegas Office
The Las Vegas retail property market continued to hold strong for the first quarter of 2023. Consumer confidence has been growing for this unique market as conventions, sporting events, entertainment venues and, of course, gambling and hospitality destinations are all attracting visitors by the droves. Demand for new product is high and vacancies have been on the decline. Total retail in excess of 10,000 square feet (SF) totaled approximately 94 million SF in the greater Las Vegas area to end the first quarter of 2023. Retail development activity has experienced a tremendous rebound following the lull during the pandemic, with just over 1.2 million SF in the first quarter’s development pipeline. The first quarter wrapped up with a vacancy rate of 5.6 percent, a drop of 30 basis points from 5.9 percent in Q4 2022.
Investment sales volume in Q1 2023 was down a bit, compared to historical figures. There were 18 closed transactions totaling $82.5 million. This is expected as the lending environment has been continuing see elevated interest rates and many investors have been waiting on the sidelines in the hopes that values will come down and interest rates will trend in the same direction. Over the next several quarters, more investment activity for retail in the Las Vegas region is expected.
