Nevada Commercial RE Report Retail Summary

Northern Nevada

by Gary Tremaine & Amanda Brierton, Dickson Commercial

Although the second quarter saw a considerable decrease in overall commercial sales, retail numbers increased in volume by almost $55 million. There were 20 total sale transactions in Q2 2022, totaling $97,968,389 in volume, the second highest quarter in the last few years. The Iron Horse shopping center was the most notable sale, which accounted for nearly 20 percent of the quarter’s volume.

The market continues to have the same challenges, lack of inventory and high construction costs. There are several new developments added that created some inventory but at lease rates much higher than existing properties.

There were two notable lease transactions in excess of 30,000 square feet (SF) this month. The largest was 50,861 SF leased by AutoZone in the Iron Horse Shopping Center in Sparks. This was formerly a portion of Target, dismissed into three spaces which includes Tractor Supply and Harbor Freight. The second largest lease this quarter was 31,792 SF. This building was a former bowling alley, AMF Starlite Lanes. The new tenant will be Starlite Express, an indoor car wash that has multiple locations in California currently.

The newest retail development is 210 Silver Lake Road within the North Valleys submarket. The total size of the project is just over 18,000 SF. The first tenant to join the center is Norte Cantina, a 6,000-square-foot Mexican cuisine restaurant with an outdoor patio. The building is over 70 percent leased with only 4,800 SF available for lease.

Southern Nevada

by Hillary Steinberg, Annon Young Las Vegas Office

Las Vegas’ retail real estate’s upward trend continued throughout the second quarter of 2022. Direct leasing triple net rental rates hit $20.85 per square foot (PSF), up from last quarters average of $20.57 PSF. Retail property transactions came in at 23 sales worth a total of $438.9 million. The largest sale of the quarter was the purchase of 3725, 3729 & 3735 S Las Vegas Blvd at E Harmon Ave by Fertitta Entertainment for $270 million, of which $128 million is included in the $438.9 million for the quarter.

Retail vacancy decreased to 4.7 percent, significantly lower than Q2 2021’s 5.8 percent, the ninth successive decline. Total availability trended similarly, from 8.7 million SF last year to 7.1 million SF currently. The Southwest Submarket continues to have the most square footage under construction at over 48,000 SF, and strong asking lease rates averaging $2.15 SF triple net. Mixed-use projects under construction due to deliver before the end of the year include 118,000 SF at Evora; 25,500 SF at The Watermark; and a 3,500-SF restaurant property on Via Inspirada. And second generation restaurant spaces are averaging $32.64 triple net depending on fixtures and location.

Depending on the reasons, now may be a good time to either buy or sell. With not as much value-add available, increased lease rates during option terms, the types of retailers and how well the tenants fared during the early days of COVID are indicators of potential success.

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