Northern Nevada
By Gary Tremaine & Patrick Sheehan, Dickson Commercial
During the second quarter of 2023, retail investment continued at a relatively slow pace. Despite the ever changing capital markets, there was a number of single-tenant investment transactions in Q2, highlighted by the sale of a single-tenant, O’Reilly’s Auto Parts property in Sun Valley, at a 5 percent cap rate.
In the second quarter, two lease transactions stood out: the leasing of Hank’s Farmers Market in Paradise Plaza and Twin Peaks in the Redfield Promenade. These deals collectively secured 43,245 square feet of retail space. The Stonebrook Retail Development was the most noteworthy project in Q2 within the Reno/Sparks retail landscape. The addition of Cracker Barrel marks the continued expansion of the recently constructed retail development, West End Commons.
The retail market continued to face development challenges, including high construction costs and the need to counter growing inflation. Despite these hurdles, several new projects are progressing, with capital-based setbacks. Regional and national tenants continue to express interest in our area, contributing to stable vacancy rates.
Southern Nevada
By Hillary Steinberg, Avison Young
The Las Vegas retail property market continues to hold strong and remain consistent with low vacancy rates over the past several quarters with Q2 2023 ending with a 5.6 percent vacancy. The demand from tenants is significant even for larger spaces that were vacated by a number of retailers during the pandemic.
Retailers see the opportunities in Las Vegas not afforded by other key markets across the United States. These include a consistent tourist and convention visitor population as well as an exciting expansion of new entertainment, sports, dining, and hotel options with billions of dollars of capital being invested over recent years and more projects in various stages of planning or development. Additionally, Las Vegas is being supported by a growing residential population as people relocate here to fill jobs and to enjoy a lower cost of living.
Retail development activity has experienced a tremendous rebound following the pause because of the pandemic. The development pipeline totaled more than 1.2 million sf at the end of the second quarter making it the second-largest development pipeline the Las Vegas retail market has experienced over the past five years.
