By Gary Tremaine and Amanda Brierton, Dixon Commercial
Although 2021 ended with a large surge in volume (about $200 million) in the first quarter, revenue at the start of the year declined to $45 million in transactions. This is more in line with the 24 months back to previous quarters.
Refurbishment projects were an issue in the first quarter. Especially the building at 5390 Longley Boulevard. Located near the intersection of Longley and McCarran, the 33,682 square foot former Gold Gym was purchased for redevelopment into a multi-purpose and multi-disciplinary medical facility.
Renault’s retail leasing market remains flat for Q1 as expected. Stock is limited as the retail vacancy rate is 5 percent, its lowest in ten years. There are some new developments that will provide more retail opportunities in our market which should help with our limited inventory.
That being said, we have two new developments in our market that are already almost 100 percent occupied – the West End Commons in Reno and the Red Rock retail development in the Northern Valleys. The West End Commons is home to our third In-N-Out in Reno/Sparks, Reno’s first with Cracker Barrel (coming soon), Chipotle, Firehouse Subs and several other national grocery retailers.
By Liz Clare, Avison Young Las Vegas office
In the first quarter of 2022, the retail real estate sector in Las Vegas remained strong. According to CoStar, the overall vacancy rate at the end of the first quarter was just 5.5 percent, which is slightly lower than in the fourth quarter of 2021. To keep competition for available space high, various retail categories are entering the market. Drive-Thru Quick Service Restaurant (QSR) is the most popular category for a new location. Strong interest from dealers and tight vacancies have pushed tariffs up further. Overall, triple net rental rates increased from $20.02 in Q4 2021 to $20.69 in Q1 2022. These rates have increased for nine straight quarters (since Q4 2019) despite the pandemic.
The new development has done well with 40 retail property deliveries so far in 2022 totaling nearly 300,000 square feet, with most properties pre-let. There are currently 63 properties under construction. According to Real Capital Analytics, there were a significant number of retail property sales in the first quarter of this year. These totaled over $241 million at an average price of $261 million per square foot.
Due to the long-term growth that is part of the cyclical nature of real estate, we are on the road to improvement. With the cost of living rising, interest rates rising and spending rising, retailers are feeling the impact and are being pushed to the limit of what they can reasonably afford on real estate costs. I see changes on the horizon as we keep pace with the changing economic climate.