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Category – Market Reports

Commercial Real Estate Market Seeing More Construction, Lower Vacancy Rates

calv_xceligentA report released today by Xceligent in partnership with the Commercial Alliance Las Vegas (CALV) paints a mostly positive picture of the commercial real estate market in Southern Nevada, with most sectors continuing to gain ground through the third quarter of 2017.

“For the most part, the local commercial real estate market continues to get better each quarter,” said CALV President Jennifer Ott, CCIM, and a longtime local commercial real estate broker who specializes in the retail market. “I think the retail market continues to be a good example of that. While we’re all seeing national news about well-known retailers that have been closing or cutting back, this report and our experience here in the Las Vegas area actually shows that the retail market has been improving in the past few years.”

The report shows the retail market remained on the rise, absorbing nearly 50,000 square feet of space during the third quarter. This marks the fourth straight quarter that the local retail market has posted a positive absorption rate, according to Xceligent’s statistics. At the same time, the total retail vacancy rate in Southern Nevada fell to 9.4 percent, down 0.3 percent from one year earlier.

“This is good news for the industry and for the local economy,” Ott said.

Tina Hickman, director of analytics for Xceligent for the Las Vegas market, pointed out that nearly 150,000 square feet of retail space has been built so far this year in Southern Nevada – more than in past years. Another 180,000 square feet of retail space is under construction, with more than 800,000 additional square feet of space planned in local centers such as Mountain’s Edge Marketplace, The Landing and Shanghai Plaza.

Hickman said an improving local economy and job market are boosting the office, industrial and retail markets. While other cities are seeing a decline in “brick and mortar storefronts,” she said “Las Vegas continues to hold strong in the sector, due to the advantage gained from being a tourist destination.” With much of Southern Nevada’s new retail space being pre-leased, Hickman expected retail absorption to remain positive during the rest of 2017.

The story is similar for the office market, she said. The total office vacancy rate continued to decline, dropping to 14.9 percent during the third quarter of 2017, down 0.3 percent from the same quarter in 2016. The local office market also recorded 27,093 square feet of positive absorption during the third quarter, marking its fifth consecutive quarter of doing so.

Brenden Graves, sales executive for Xceligent in Las Vegas, said local office vacancy rates remain higher than historic averages. However, he explained that “obsolete” office space, especially in the central and northeast parts of Las Vegas, have a lot to do with those numbers. He added that office construction has been on the rise, though leasing activity has recently slowed.

In the local industrial market, Xceligent reported that more than 2.8 million square feet of space is under construction. High-profile new industrial tenants include Amazon, Dr. Pepper and Snapple and the Southern Nevada Teamsters Local 631.

According to the report from Xceligent and CALV, the local industrial market recorded nearly 1.5 million square feet of positive absorption during the third quarter of 2017. Due largely to new inventory being added to the market, Hickman said the total industrial vacancy rate increased by 0.5 percent, from 5.6 percent one year ago to 6.1 percent during the third quarter of 2017.

“Much of the focus for our industrial sector has been placed on new big-box tenants that are beginning to call Vegas home,” Hickman said. “But the lesser-sized inventory is still showing positive gains. Spaces ranging in size from 25,000 square feet and under account for over 3.3 million square feet of space reported as leased thus far in 2017.”

Xceligent, a growing provider of commercial real estate information, partners with CALV and local commercial real estate professionals through their Quarterly Advisory Boards to produce quarterly reports on trends and conditions in the office, industrial and retail markets in Southern Nevada. The report released this week covers activity through the third quarter of 2017.

Ott, whose professional designations include being a Certified Commercial Investment Member (CCIM), is one of dozens of leading local brokers who volunteer to serve on advisory boards that help verify and produce these reports.

Applied Analysis Reports On Q2 2017 Market Performance

applied analysisIndustrial Market

After releasing its second quarter 2017 industrial market report today, local business advisory firm Applied Analysis noted the Las Vegas industrial market added over 2.4 million square feet of newly constructed space and registered net absorption of nearly the same number. These developments edged the vacancy rate down to 6.9 percent for the second quarter of 2017. Compared to the prior quarter (Q1 2017), the vacancy rate declined 10 basis points (-0.1 percentage points), and compared to a year ago (Q2 2016), the rate decreased by 30 basis points (-0.3 percentage points).

During the second quarter, the industrial market experienced the largest amount of new inventory in a single quarter with 2.4 million square feet of completions. Chief among these was the completion of Amazon’s new 785,500-square-foot fulfillment center located at Northgate Distribution Center at 4550 Nexus Way. Switch completed another building as part of their ongoing data center expansion at 7356 Lindell Road, which added over 343,400 square feet of occupied space to the market. Moreover, Prologis Sunrise Industrial Park completed a 342,300-square-foot building at 4800 E Cheyenne Avenue – a build-tosuit for Walmart. Other notable completions included two buildings at Prologis Las Vegas Corporate Center in the north submarket, adding 260,000 square feet of inventory to the market, with one building fully leased to Dr. Pepper and Snapple and the other reportedly has space leased by Nexgistics and Muscle & Strength.

Office Market

After releasing its second quarter 2017 office market report today, local business advisory firm Applied Analysis noted that the Las Vegas office market continued to experience positive demand during the period. The vacancy rate fell to 19.3 percent during the quarter, which represents a decline of 40 basis points (-0.4 percentage points) from the prior quarter (Q1 2017). Compared to a year ago (Q2 2016), the office market vacancy rate has declined 130 basis points (-1.3 percentage points); the vacancy rate is down significantly from 25.3 percent in early 2013.

Office market inventory increased by 257,300 square feet in the second quarter as four notable projects completed construction, bringing total inventory to over 54.7 million square feet. The new UFC headquarters building, totaling 180,000 square feet, completed construction and is fully occupied by the mixed martial arts promotion company. In addition, three speculative projects wrapped up construction: Cimarron Courtyard Office Condominiums Phase 2 (44,000 square feet), Dignity Health St. Rose Dominican North Campus (18,000 square feet) and 1581 Mount Mariah Drive (15,300 square feet).

The office market experienced 413,550 square feet of positive net absorption (or net move-ins) during the second quarter of 2017. Mobile website developer CML Media Corp (dba Mopro) reportedly leased 16,950 square feet at 101 Convention Center Drive and innovative cash access services company Global Payments Gaming Services, Inc. reportedly leased 15,250 square feet at City Center West at 7201 West Lake Mead Boulevard. Other selected transactions included Building Blocks for Business LLC’s lease for 15,000 square feet at 6170 North Durango Road, Progistics-TAG’s lease for 10,000 square feet at 2270 Corporate Circle and Asembia LLC’s lease for 9,000 square feet at 3844 Meadows Lane.

Retail Market

After releasing its second quarter 2017 retail market report today, local business advisory firm Applied Analysis noted the Las Vegas retail market’s direct vacancy rate fell to 8.1 percent by the end of the period. Compared to the prior quarter (Q1 2017), the vacancy rate declined 30 basis points (-0.3 percentage points), and compared to a year ago (Q2 2016), the rate decreased by 70 basis points (-0.7 percentage points). Vacant sublease space in anchored retail centers added 848,000 square feet of availability, resulting in a total vacancy rate of 9.7 percent (direct vacancy plus vacant sublease space). The total vacancy rate was also down 30 basis points (-0.3 percentage points) from the preceding quarter and 80 basis points (-0.8 percentage points) from the prior year.

Anchored retail inventory increased slightly to 53.7 million square feet during the second quarter with the completion of the first phase of Mountain’s Edge Marketplace located at 7975 Blue Diamond Road in the southwest submarket. The center added 75,600 square feet to the market, which included the 59,300-square-foot Albertsons grocery store. The company now has 31 stores in the Las Vegas Valley.

The retail market experienced 199,600 square feet of positive net absorption during the second quarter of 2017. Burlington Coat Factory leased 48,900 square feet at Sahara Center located on the northeast corner of Sahara Avenue and Hualapai Way. In addition, Seafood City Supermarket leased 42,600 square feet in the former Sport Chalet’s space at The Arroyo Market Square located at 7230 Arroyo Crossing Parkway on the southwest corner of Rainbow Boulevard and Interstate 215. Other notable transactions include Marshalls taking 21,000 square feet of space at Best in the West located at 2050 North Rainbow Boulevard and Planet Fitness expanding their brand to The A Mall, leasing a 17,800-square-foot space at 1205 East Sahara Avenue.

For the complete report, please visit Applied Analysis at www.appliedanalysis.com

Colliers Mid-Year Report Shows Positive Outlook

colliersThe recovery and expansion of Southern Nevada’s commercial real estate market continued in the second quarter of 2017. The industrial and multifamily markets are keeping up with near record levels of new development, medical office has picked up its pace dramatically, professional office continues to improve and the retail market bounced back from negative net absorption in the first quarter.

The chief complaint of industrial brokers in 2016 was that they were turning away tenants because there were not enough large contiguous spaces on the market. In 2017, developers answered that challenge, constructing by midyear 3.7 million square feet of new industrial product, all of it in the form of large warehouse/distribution buildings. The market has answered with 3.6 million square feet of net absorption, indicating that indeed there was demand in Southern Nevada that was not being met prior to the new developments of 2017 entering the market. Industrial vacancy remains a low 5.4 percent and the average asking rate for industrial space has not suffered much for all of the new development.

“With Southern Nevada’s new industrial construction boom well underway, the result has been encouraging,” remarked John Stater, the research manager of Colliers International’s Las Vegas office.

The hot multifamily market has kept up with the industrial market in terms of construction in 2017. Inventory of multifamily in Southern Nevada could expand by more than 5,000 units this year, and so far demand is keeping pace. Multifamily vacancy is a very low 3.3 percent, and asking rents continue to rise. An expanding population and difficulty for some to qualify for home loans should keep demand for multifamily high in 2017 and 2018. Sales of multifamily projects are slower this year than last, although the average sales price is up significantly.

Sales of hospitality properties remained light in the second quarter of 2017, although the announced sale of the Stratosphere and Arizona Charlie’s could improve matters by the end of the year depending on when those sales are recorded. Visitor volume is a tad shy of where it was last year at this time, but gaming revenue continues to grow. A total of 2,143 rooms sold in the first half of 2017, with total sales volume of $69.5 million and an average sales price of $32,424 per room.

Mike Mixer, Executive Managing Director for Colliers Las Vegas said, “While sales volume in 2017 may not equal that recorded in 2016, the overall sales picture remained strong at mid-year.”

Southern Nevada’s office market saw dramatic improvement in the second quarter of 2017. After five years of recovery, the office market saw its strongest demand in nine quarters, with net absorption of 545,955 square feet. This brought vacancy down to 16.1 percent, while asking rents remained at $2.02 per square foot (psf) on a Full Service Gross (FSG) lease. Vacancy is probably too high and asking rates too low to stimulate a large number of new speculative office developments in the Valley, but niche development will likely begin soon.

The medical office market in Southern Nevada may have finally shaken off the turmoil, both economic and governmental, that has plagued for the past few years. Net absorption has been positive for over a year now and was especially strong in the second quarter of 2017. Vacancy is still elevated, but it is falling. Development is on the rise, and appears to be stimulating the market, perhaps bringing medical practitioners the space designs they need to compete in the changing health care landscape. Whether the next round of healthcare reform in Washington D.C. will knock things off kilter is unknown, but as of yet they do not appear to be dampening demand for medical office space in Southern Nevada.

Despite some headwinds created by the closure of some large anchor stores in Southern Nevada, the retail market is looking up. A weak first quarter was followed by a much stronger second, putting the Valley on pace to chock 2017 up as another year of retail recovery. The second half of the year will see significant new retail inventory with strong pre-leasing completed in Southern Nevada, which should boost net absorption numbers for the year as a whole, and contribute to continued decreases in the vacancy rate.

2017 at midyear presents a mixed bag for land sales. In terms of acres sold, only commercial land looks poised to match 2016 levels. Sales are down tremendously for industrial land in 2017, though it should be pointed out that industrial sales were exceptionally strong in 2016 and would be difficult to match. Residential sales are down slightly compared to 2016, and price per square foot of residential land is also down. The price decreased experienced in residential land sales is reversed for industrial and commercial land, with commercial land experiencing a significant increase in price per square foot. This leaves us with a 2017 in which the number of acres of land sold will likely decreased compared to 2016, while total sales volume will likely match or beat 2016 levels – and all of this in the face of increased (or in industrial’s case near record) levels of new development. Land sales have been relatively strong since 2013, when real estate development was very restrained. Sales might lag a bit in 2017, but at the rate developers are developing, another banner year cannot be far away assuming the local economy continues to grow.

The full second quarter report of 2017 can be downloaded at: http://www.colliers.com/en-us/lasvegas/insights/marketnews/lvqreport.

Most arrows pointing in positive direction for local commercial real estate market

calv_xceligentA report released today by Xceligent in partnership with the Commercial Alliance Las Vegas (CALV) shows the commercial real estate market in Southern Nevada posting mostly positive results through the first half of 2017.

“Most of the arrows continue to point in a positive direction, especially when compared to the past several years,” said CALV President Jennifer Ott, CCIM, and a longtime local commercial real estate broker who specializes in the retail market. “The retail market is a good example. After a relatively slow first quarter, we saw the retail sector pick up during the second quarter. That trend should continue through the rest of 2017.”

According to the report, the total vacancy rate for the local retail market went from 9.8 percent in the first quarter of 2017 to 9.5 percent during the second quarter. The local retail market recorded 177,756 square feet of positive absorption during the second quarter of 2017, up from 17,202 square feet during the first quarter of this year.

Tina Hickman, director of analytics for Xceligent for the Las Vegas market, said more than 200,000 square feet of retail space is under construction in Southern Nevada, with a new Walmart Supercenter in the Southwest part of Las Vegas accounting for most of that.

Meanwhile, Ott said the local office market continues to improve after seeing vacancy rates approach record highs during the recession. One reason for that, Ott and Hickman agreed, is Southern Nevada’s overall economic and job growth.

The total office vacancy rate continued to decline, dropping from 15.1 percent in the first quarter of 2017 to 14.9 percent in the second quarter. At the same time, the local office market recorded 125,089 square feet of positive absorption during the second quarter, compared to 178,805 square feet during the first quarter of 2017.

 Brenden Graves, sales executive for Xceligent in Las Vegas, noted that “although office vacancies are high, this is largely due to obsolete product on the market in the central and northeast markets. The office market actually has felt a compression in space that will likely soon affect rates.”

Hickman said 286,876 square feet of office space is now under construction in Southern Nevada, with most of it being built in the Southwest part of Las Vegas.

“Construction activity is gaining ground even more than last quarter, as we continue to see more plans in the pipeline for office development,” she added. “An additional 430,000 square feet of office space is currently planned and proposed for the Las Vegas metro area. Absorption is expected to remain positive during 2017.”

The story is similar in the Southern Nevada industrial market, where Xceligent is tracking 13 industrial buildings under construction, adding more than 3.3 million square feet of space to the market. Another 2 million square feet of space has been proposed.

Hickman said the local industrial market recorded 1.8 million square feet of positive absorption during the second quarter of 2017, more than triple the amount of activity recorded during the first quarter of 2017. Still, the total industrial vacancy rate increased to 6.0 percent during the second quarter, up from 5.6 percent during the first quarter.

“Industrial vacancy rates have experienced a slight increase due to the new inventory,” she explained. “Much of this space is scheduled to be occupied within 2017, and absorption is expected to continue an upward trend.”

Graves also commented on rising land costs and the increasing number of multifamily developments being built around Southern Nevada.

“In regard to land, we’re seeing that prices on a per-acre basis have outrun most product types’ appetite,” he said. “This has created an influx of land purchased for multifamily, and we’re not sure where the renters are going to come from.”

Xceligent, a growing provider of commercial real estate information locally and nationally, partners with CALV and local commercial real estate professionals through their Quarterly Advisory Boards to produce quarterly reports on trends and conditions in the office, industrial and retail markets in Southern Nevada. The report released this week covers activity through the second quarter of 2017.

Ott, whose professional designations include being a Certified Commercial Investment Member (CCIM), is one of dozens of leading local brokers who volunteer to serve on advisory boards that help verify and produce these reports.

 

U.S. Industrial Market Maintains Record-Breaking Pace

cushman1U.S. industrial markets absorbed 53.8 million square feet (MSF) of space in the first quarter of 2017, well above the quarterly absorption average of 49.3 MSF witnessed during the current economic expansion and significantly higher than the average quarterly absorption of 40.6 MSF registered during the last two economic growth cycles, according to Cushman & Wakefield’s first quarter industrial market report.

The national industrial vacancy rate continued to decline in the first quarter, falling 20 basis points (bps) from Q4 2016 and 80 bps from a year ago to 5.3%. Industrial vacancy is now a full 300 bps below the 10-year historical average of 8.3%. Vacancy rates declined or held firm during the quarter in 51 of the 79 markets tracked by Cushman & Wakefield. Strong leasing fundamentals have driven vacancies for each industrial product lower than at any point in the last economic cycle.

John Morris, Executive Managing Director of Logistics & Industrial Services for the Americas, says the outlook for the industrial sector remains promising, and he expects 2017 to be another year of solid growth.

“Going forward, the demand drivers for industrial remain firmly intact,” Morris said. “Much of what drives demand for industrial space links to the U.S. consumer. With consumer confidence at its highest level in 16 years, growing optimism suggests consumer spending will accelerate.

“It isn’t just that consumers are spending, either,” Morris continued. “It is how they are purchasing, which is increasingly online. Online sales continue to drive significant requirements for new industrial space across the country. An uptick in eCommerce-related leasing by 3PLs and healthy demand from other logistics and distribution occupiers are fueling rent growth.”

U.S. industrial rents increased 4.2% in the first quarter compared to a year-ago. Industrial rents increased in 71 of 79 markets tracked by Cushman & Wakefield from the first quarter of 2016 to the first quarter of 2017, with over one-third of the country reporting double-digit gains. In many markets, industrial rents are now either at their historic high or quickly approaching it, and on a national level, we are witnessing rental rate appreciation for every industrial product type.

On the development front, 54.9 MSF of industrial product was delivered in the first quarter with the majority of deliveries coming online in major industrial markets and primary inland distribution hubs. Developers continued to break ground on more speculative projects in many markets. In the first-quarter, speculative projects under construction totaled 145.5 MSF, comprising 66.3% of the total 219.3 MSF currently under construction.

“Construction continues to ramp up nationally, with U.S. ground breakings up 24% since the fourth quarter of 2016, but the majority of speculative development remains concentrated in primary industrial markets, as does the most significant notable leasing volume,” said Jason Tolliver, Head of Industrial Research, Americas. “The Inland Empire, Dallas and Atlanta are where one-third of the nation’s speculative projects are underway, but these markets also turned in the strongest first-quarter leasing performance, comprising nearly 30% of all U.S. net absorption. The script has been the larger the market, the stronger the leasing, and the greater the development.

“Both eCommerce and international trade are driving logistics-related development, and the growth of both is accelerating,” Tolliver continued. “Given improved fundamentals, the current speculative pipeline and our expectation that 2017 will be another year where net absorption surpasses 225 MSF, there is some room left before supply catches demand. That gap will close first in the primary markets where a number of speculative projects are poised to come online in the next two quarters, but even then the market shift should be subtle.  There is no market where vacancy is poised to skyrocket due to pending deliveries.”

In the first quarter of 2017, the top 10 strongest markets in terms of demand for industrial space were Atlanta, with 6.4 MSF of absorption; Dallas/Ft. Worth, with 5.4 MSF; the Inland Empire, with 4.2 MSF; Cincinnati, with 4.0 MSF; Chicago, with 2.7 MSF; the Pennsylvania I-81/I-78 Distribution Corridor, with 2.6 MSF; Kansas City, with 2.6 MSF; Memphis, with 2.2 MSF; Phoenix, with 2.1 MSF; and Stockton, CA, with 2.0 MSF.

The tightest markets in terms of overall vacancy included Los Angeles, at 1.3%; Orange County, at 2.0%; Oakland/East Bay, at 2.3%; Cincinnati and Savannah, GA, at 3.0%; San Jose, at 3.1%; Nashville, at 3.2%; Charlotte and Seattle, at 3.4%; and Detroit, at 3.5%.

Las Vegas Commercial Real Estate Continues to See Growth in Industrial, Office Markets in 2017’s First Quarter

The first quarter Marketbeat report by Cushman & Wakefield Commerce for Las Vegas is now available, and it shows that the Las Vegas market continued its post-recession recovery in the first three months of 2017. The reports detail the industrial, office and retail markets, as well as the general state of the economy and commercial real estate in Southern Nevada.

“The first quarter continued the positive upswing that Las Vegas and Southern Nevada has been experiencing recently, with strong indications that the overall commercial real estate market will continue to strengthen in 2017,” said Michael Dunn, market leader for the Las Vegas office of Cushman & Wakefield Commerce. “The industrial market is the strongest sector at the moment, and the momentum of the industrial market is expected to continue for the balance of the year. The industrial market is tight right now, particularly for smaller to medium sized companies. Construction is brisk; however, most of the buildings coming online are for companies seeking large spaces such as those in the e-commerce and distribution market.”

New construction continued to improve, especially in the industrial sector with more than 4.7 million square feet of buildings are expected to be delivered in the upcoming quarters. North Las Vegas and Henderson submarkets led the way with more than 4 million square feet of new industrial construction.

The office market’s occupancy improvement continued in the first quarter with a decreased vacancy rate. The retail market, however, will continue to remain landlord friendly in regards to neighborhood and power centers in the foreseeable future. E-commerce continues to disrupt major retailers as store closures and bankruptcies continue to make headlines both nationally and locally.

Las Vegas Industrial Snapshot

The overall industrial vacancy rate continues to remain relatively low at 5.7 percent. If demand in the large e-commerce and distribution demand wanes, then there may be greater availability later this year with supply outweighing demand. The question is if demand will keep pace with supply in the big box sector.

Las Vegas Office Snapshot

The Las Vegas office vacancy rate was 15.1 percent at the close the end of March 2017, which is down 2 percent from the first quarter of 2016. New office construction during the first quarter totaled more than 100,000 square feet and is expected to continue to rise in the upcoming quarters.

Las Vegas Retail Snapshot

The retail real estate market slowed down in the first quarter, but continues to see a positive absorption rate, which is expected to remain positive through 2017. It is also expected that lease rental rates will continue to rise and vacancy rates will continue to decrease in neighborhood and power centers, until more construction begins in the Las Vegas retail market. One recent event that could make a huge impact on the Las Vegas retail real estate market in the next few years is arrival professional football. The relocation of the Oakland Raiders to Las Vegas and the new 65,000-seat stadium is expected to result in 6,000 new jobs for the market.

To access the full Marketbeat reports, please visit: http://www.comre.com/research

Median Home Prices In Southern Nevada Nearly Double In 5 Years – GLVAR Report

Dave J. TinaThe recent trend of rising home prices and sales in Southern Nevada continued through March, according to a report released Friday by the Greater Las Vegas Association of REALTORS® (GLVAR).

GLVAR reported the median price of existing single-family homes sold during March through its Multiple Listing Service (MLS) increased to $242,000. That was up 0.8 percent from February and up 10.0 percent from March 2016. Meanwhile, the median price of local condos and townhomes sold in March was $122,950, up 4.2 percent from February and up 4.2 percent from March 2016.

GLVAR President David J. Tina, a longtime local REALTOR®, pointed out that the median home price in Southern Nevada has nearly doubled from $123,000 five years ago and has continued to increase this year despite potential headwinds like a shrinking local housing supply and rising mortgage interest rates.

“We continue to see a strong demand for housing heading into what is traditionally our best time of year for home sales. Combined with a tight supply, I think our home prices and home sales may continue to get a boost from the positive economic news we’ve been enjoying lately, including last week’s announcement that the Raiders are moving to Las Vegas,” Tina said. “While it’s hard to quantify, I think news that Las Vegas will soon be an NFL city with a state-of-the-art sports stadium is one more thing that solidifies our position as a world-class city and something that pushes some buyers over the threshold and encourages them to buy property here now.”

Like prices, local home sales have also been increasing this year. The total number of existing local homes, condos and townhomes sold in March was 3,903, up from 3,488 in March 2016. Compared to one year ago, sales were up 14.8 percent for homes and up 0.4 percent for condos and townhomes.

According to GLVAR, 2017 is ahead of the sales pace in 2016, when 41,720total properties were sold in Southern Nevada. That was more than the 38,577 properties sold during 2015. It was also more than in 2014, but fewer than each year from 2009 through 2013.

At the current sales pace, Tina said Southern Nevada has less than a three-month supply of homes available for sale. A six-month supply is considered to be a balanced market.

By the end of March, GLVAR reported 5,488 single-family homes listed for sale without any sort of offer. That’s down 23.9 percent from one year ago. For condos and townhomes, the 715 properties listed without offers in March represented a 69.0 percent drop from one year ago.

For several years, GLVAR has been reporting fewer distressed sales and more traditional home sales, where lenders are not controlling the transaction. That trend continued in March, when 4.4 percent of all local sales were short sales – which occur when lenders allow borrowers to sell a home for less than what they owe on the mortgage. That’s down from 5.9 percent of all sales in March 2016. Another 5.4 percent of all March sales were bank-owned, down from 7.1 percent one year ago.

GLVAR said 29.5 percent of all local properties sold in March were purchased with cash, compared to 27.7 percent in March 2016. That’s well short of the February 2013 peak of 59.5 percent, indicating that cash buyers and investors are still more active in Southern Nevada than in most markets, but that their influence has generally been declining.

These GLVAR statistics include activity through the end of March 2017. GLVAR distributes statistics each month based on data collected through its MLS, which does not necessarily account for newly constructed homes sold by local builders or homes for sale by owners. Other highlights include:

  • The total value of local real estate transactions tracked through the MLS during March was more than $907 million for homes and more than $94 million for condos, high-rise condos and townhomes. Compared to one year ago, total sales volumes in March were up 23.7 percent for homes, but down 11.2 percent for condos and townhomes.
  • Homes and condos continued to sell faster than last year at this time. In March, 75.9 percent of all existing local homes and 81.2 percent of all existing local condos and townhomes sold within 60 days. That compares to one year ago, when 65.5 percent of all homes and 64.9 percent of all condos and townhomes sold within 60 days.

Southern Nevada Home Prices Keep Moving On Up

glvarThe Greater Las Vegas Association of REALTORS® (GLVAR) reported Tuesday that Southern Nevada home prices and sales continued to increase despite a shrinking housing supply.

According to GLVAR, the median price of existing single-family homes sold during February through its Multiple Listing Service (MLS) increased to $240,000. That was up 0.8 percent from January and up 8.9 percent from February 2016. Meanwhile, the median price of local condos and townhomes sold in February was $118,000, up 4.0 percent from January, but down 2.9 percent from February 2016.

GLVAR President David J. Tina, a longtime local REALTOR® who became GLVAR’s president on Jan. 1, noted that the median single-family home price in Southern Nevada one year ago at this time was $220,350. Two years ago, it was $205,000. Five years ago, in February of 2012, it was $121,000.

“So, we’ve come a long way in the last five years,” Tina said. “This shows that our home prices are still increasing, but they aren’t rising as fast as they were a few years ago. I think this stability is better than the big peaks and valleys we experienced in the last decade. And homeowners are still seeing a healthy rate of appreciation, which is good for our economy and our housing market.”

Local home sales have also been on the rise during the past year or more. Tina attributed this sales increase to a growing demand for housing, fueled by an increasing local population and buyers feeling more confident about the local economy and job market. Even with local home prices increasing steadily over the past five years following the downturn from 2008-2011, he added that Southern Nevada home prices are still a relative bargain when compared to cities in neighboring California.

The total number of existing local homes, condos and townhomes sold in February was 2,815, up from 2,676 in February 2016. Compared to one year ago, sales were up 6.5 percent for homes and up 0.4 percent for condos and townhomes.

According to GLVAR, a total of 41,720 such properties were sold in 2016. That was more than the 38,577 properties sold during 2015. It was also more than in 2014, but fewer than during each of the previous five years.

As for headwinds facing the local housing market, Tina said an increasingly tight local housing supply continues to create challenges for would-be buyers – especially those looking for lower-priced properties. At the current sales pace, he said Southern Nevada has less than a three-month supply of homes available for sale. A six-month supply is considered to be a balanced market.

By the end of February, GLVAR reported 5,564 single-family homes listed for sale without any sort of offer. That’s down 24.1 percent from one year ago. For condos and townhomes, the 758 properties listed without offers in February represented a 66.6 percent decrease from one year ago.

In recent years, GLVAR has been reporting fewer distressed sales and more traditional home sales, where lenders are not controlling the transaction. That trend continued in February, when 4.6 percent of all local sales were short sales – which occur when lenders allow borrowers to sell a home for less than what they owe on the mortgage. That’s down from 6.6 percent of all sales in February 2016. Another 6.0 percent of all February sales were bank-owned, down from 8.6 percent one year ago.

GLVAR said 31.4 percent of all local properties sold in February were purchased with cash, matching the percentage in February 2016. That’s well short of the February 2013 peak of 59.5 percent, indicating that cash buyers and investors are still more active in Southern Nevada than in most markets, but that their influence has generally been declining.

These GLVAR statistics include activity through the end of February 2017. GLVAR distributes statistics each month based on data collected through its MLS, which does not necessarily account for newly constructed homes sold by local builders or homes for sale by owners. Other highlights include:

  •  The total value of local real estate transactions tracked through the MLS during February was more than $621 million for homes and more than $73 million for condos, high-rise condos and townhomes. Compared to one year ago, total sales volumes in February were up 11.7 percent for homes, but down 15.6 percent for condos and townhomes.
  •  Homes and condos continued to sell faster than last year at this time. In February, 69.6 percent of all existing local homes and 76.5 percent of all existing local condos and townhomes soldwithin 60 days. That compares to one year ago, when 60.9 percent of all existing local homes and 61.9 percent of all existing local condos and townhomes sold within 60 days.

Cushman & Wakefield Examines the Convergence of eCommerce and Real Estate

“Bricks vs. Clicks II” Webinar Recaps the Holiday Season and Explores Implications for Retail and Industrial Product

Chicago - Holiday retail sales grew 4.0 percent in 2016, well above the 2.6 percent 10-year average. Yet eCommerce performance eclipsed brick-and-mortar resoundingly, and the long-term – year-round – implications for both retail and industrial real estate are increasingly significant, according to commercial real estate services firm Cushman & Wakefield.

The firm in February hosted the second installment of its “Bricks vs. Clicks” webinar series, offering an analysis of the holiday season, and the general impact of eCommerce on the supply chain and physical store locations. Cushman & Wakefield’s Ben Conwell, eCommerce Fulfillment Practice Group leader (and former Amazon North American operations real estate director), and Garrick Brown, head of Retail Research for the Americas, led the discussion.

“We expected a strong holiday shopping season simply because of consumer economics – with lower unemployment rate and wage growth really picking up,” Brown said. “All of that seemed to play out. The big challenge, if you’re in bricks and mortar, is did you feel much love?”

Conwell and Brown touched on a variety of relevant trends and data points including, among others:

  • eCommerce in terms of share of total overall retail and GAFO (general merchandise, apparel, furniture and other) sales.
  • Brick-and-mortar retail performance: “winners” and “losers.”
  • Peak holiday sales periods with year-over-year revenue comparisons.
  • The impact of click-and-collect, and in-store returns for purchases made online.
  • Amazon’s continued dominance in the online marketplace.
  • Walmart’s acquisition of jet.com and the early results.
  • Store closures and the impact on mall vs. non-mall shopping center vacancies.

One forward-facing trend the webinar addressed involves the evolving surge of cross-border retail with China, which is predicted to increase 177 percent over the next three years. “It is a very hot area we have been talking about with investor clients and real estate clients for some time,” Conwell noted. “The potential for going ‘upstream’ against the traditional flow of online sales is huge. We will see, unquestionably, big increases in the west-to-east sale of goods from U.S. retailers to Chinese consumers. For our industrial clients, that means continued demand for logistics product.”

The Bricks vs. Clicks II webinar archive is available in its entirety at http://www.cushmanwakefield.com/en/research-and-insight/2017/bricks-vs-clicks/. Bricks vs. Clicks I, which originally aired in November, can be viewed at http://bit.ly/2fXnPcm. Looking ahead, part three of the series will explore eGrocery and other emerging trends.

Las Vegas Commercial Real Estate Industrial Market Sees Expansion and Growth in 2016

cushman1The Cushman & Wakefield Commerce fourth quarter, 2016 Marketbeat reports were released today. They detail the industrial, office and retail markets as well as the general state of the economy and commercial real estate in Southern Nevada. The reports highlight an improved industrial market throughout 2016 and a positive outlook for the region in 2017.

“The industrial real estate market continues to be a strength to the Southern Nevada market,” said Michael Dunn, market leader for the Las Vegas office of Cushman & Wakefield Commerce. “We saw an uptick in the retail market, and the office market continues a steady recovery from the recession, but one of strongest take aways is regarding the industrial market. The national economy has strengthened and that is driving more national companies to move to Las Vegas. An example of this is in the eCommerce space with brands such as Amazon expanding in the market. This is having a positive impact on the industrial market, in particular.”

In addition to a positive outlook, the current industrial vacancy rate is at 5.4 percent and the market seeing even more downward pressure on vacancy as national companies expand into Las Vegas. The most recent entries include Moen, American Bottling and others. Dunn continued, “In our view, eCommerce will remain robust, which will ensure that big box development will remain steady in the market.”

Las Vegas Industrial Snapshot

Industrial vacancy rate remains low, at 5.4 percent, resulting in over three million square feet of space under construction. The low vacancy rates are causing lease rental rates to increase throughout 2016, topping at $0.60 per month per square foot.

Las Vegas Office Snapshot

New owner/user construction is on the horizon as the Las Vegas office market continues its steady recovery from the recession. Year-over-year vacancy is down from 18.1 percent to 15.6 percent.

Las Vegas Retail Snapshot

Retail sales growth in fourth quarter 2016 was 4 percent, compared to two percent at the end of 2015. Consumer confidence is up, but several retailers have announced closure of brick-and-mortar locations. Furthermore, eCommerce is continuing to have a large impact of certain segments of the retail sector, particular large department stores.

To access the full Marketbeat reports, please visit: http://www.comre.com/research


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