The Future of Las Vegas Commercial Real Estate
At the NAIOP Southern Nevada 2015 Outlook Event, some industry experts were forecasting 2015 to be a good year for commercial real estate, which means that other sectors of Las Vegas business will be seeing some financial improvement as well. They believe that the market will continue healing, with some sectors seeing more success than others.
Newer properties will most likely see the most financial gain, as demand for newer buildings has become very strong. In fact, some tenants may find that they cannot find a space in 2015 that will meet their needs, especially if they are looking for a more modern space with amenities. This may cause them to move to another area entirely, which will take money away from Las Vegas.
Industrial properties are also seeing some of the same issues. Big spaces of more than 500,000 feet are non-existent on the market, which means that if any come on the market, anyone that is looking for them better snatch them up quickly.
As far as retail space, high-end space is not as available, but the other markets in the area should see a boost from this lack of space, as retailers look for somewhere to go.
A healthier real estate market can mean a more robust market for land, which can lead to higher prices. Of course, these forecasts are all dependent upon the economy, which is dependent upon oil prices, the labor market, and Las Vegas development and government.
Oil prices are a biggie. Since the price for a barrel of oil has went down more than ½ in the last 6 months, tourism is seeing big gains. It is becoming more affordable for people to drive to Las Vegas and, because they do not have to spend as much money on gas, they have more money to spend once they get to their destination. A win-win situation.
How others feel about the market will have a big impact upon the real estate market as well, simply because businesses and investors coming in make a big impact upon the market. Their confidence level could dictate whether they buy local real estate and move their family or business here.
According to the Urban Land Institute, Las Vegas ranked #57 in the United States for “average” development and redevelopment opportunities. This puts them behind many other Western metro areas as far as forecasted growth. As far as commercial growth, Las Vegas placed 64 out of 75 cities to keep an eye on for investment and development potential.
While the forecasts are mixed, it is easy to see that commercial real estate will see most of their offerings being snatched up and many looking for larger spaces may not find them without a lot of searching. Strong business growth leads to increased growth in other sectors as well, so it will be interesting to watch the other real estate sectors during 2015.