Southern Nevada has approximately 46 million square feet of commercial real estate office space. As the strength of the economy continues to improve in this sector, the valley has seen a steady drop in vacancy rates. With a lack of new product on the market, there is an opportunity for new development, especially in Class A office space.
In 2018, Colliers International reported, Southern Nevada’s largest office markets saw absorption of 815,000+ square feet in the Northwest, Southwest and West Central submarkets. The location has become a huge influencer in where offices are locating, with an uptick in demand of product along the 215 Beltway in Henderson and in the Southwest and Summerlin areas. According to Kevin Orrock, president of Summerlin, “Along the 215 Beltway vacancy rates for Class A office sit around 6 percent.”
Two Summerlin, one of the newest Class A office buildings to hit the market features six-stories and 150,000 square feet of office space. Developed by The Howard Hughes Corporation, Two Summerlin was 85 percent leased prior to opening in August 2018 with only 3,000 square feet available.
“When it comes to Class A office there are only a few spaces that brokers can show regional and national clients,” states Brenden Graves, Director of Sales Operations for DC Building Group.
Professional services remain the major driver of office space throughout the valley, with about 60 percent of users occupying 2,500 square feet or less. But, with a steady influx of 4,000 people moving to Nevada each month and new-to-market companies spurring from Las Vegas’ professional sports industry and global brands locating in the valley, there will be an increased need for space. Colliers International believes, “Southern Nevada’s office market has never been more ready for inventory expansion.”
As people continue to expect the work, live, play all-in-one lifestyle, the pace for office space could accelerate. “New buildings are rumored to be being built off Buffalo and the 215, Flamingo and the 215, Downtown Summerlin and near the new Raiders’ practice facility. Over the next two years, hundreds of thousands of square feet could come online,” says Graves.