Northern Nevada
By Gary Tremaine, Dickson Commercial Group
The third quarter saw a large decrease in overall commercial sales volume, with retail numbers decreasing in volume by nearly $70 million. There were 16 total sale transactions in Q3 2022, in comparison to last quarter’s 20, being the second highest in the last few years. In North Valleys, a strip mall shopping center sold for $5,750,000 ($269.01 PSF), with a reported cap rate of 5.92 percent.
The retail market is continuing to face development factors, combating high construction costs and the need to fight growing inflation. Although this has made new development tough, several new projects are moving forward in our market.
Two notable lease transactions took place in Q3 in excess of 15,000 square feet this month. The largest was 19,090 square feet leased by Round Bowling & Amusement in the Meadowood Shopping Mall. This is near another notable lease of 17,944 by 4 Wheel Parts, also in the Meadowood Submarket.
There have been a few recent notable developments announced with large retail components. In South Meadows, DiLoreto has joint ventured with David Duffield to create a headquarters campus for Ridgeline, as well as an adjacent mixed-use development, Downtown Damonte. On the entertainment front, Reno is set to get its first ground-up hotel-casino project in decades, tentatively named the Firecreek Crossing Resort-Casino projects.
Southern Nevada
By Liz Clare, Principal-Capital Markets, Avison Young | Las Vegas
Despite rising interest rates and an overall uncertainty about the economy in general, Las Vegas continues to perform better than many major markets across the nation. For the retail sector, at 83.3 percent recovered according to Avison Young’s “Vitality Index”, the Las Vegas retail sector came in the top 25 percent out of 46 key U.S. markets for recovery comparing foot traffic for the week prior to the shutdowns in 2020 to the end of Q3 2022. When it came to retail leasing rates for the market, there is an upward trend continuing throughout the third quarter of 2022.
Investor activity has been healthy in Las Vegas due to developers adding new product to the market. Cap rates remain low for the time being, checking in this quarter at 5.2 percent. The average price per square foot for retail property in Las Vegas came in at $314.67. Retail investment sales volume totaled just under $250 million in Q3 2022, which is a 7.7 percent increase when compared to Q3 2021.
Retail property transactions came in at 35 sales worth a total of $242 million for the third quarter. Tenant demand has picked up in 2022, with vacancy returning to pre-pandemic levels with over 620,000 square feet of positive absorption for the first three quarters of the year. Retail vacancies decreased to 5.6 percent in the third quarter of 2022, lower than Q3 2021’s rate of 5.9 percent. Total availability trended similarly, from 6.9 million square feet last year to 6.2 million square feet currently.
