Las Vegas office market report
Q4 2023
Three key market themes:
Direct Asking Rents FS ($/sf)
The Las Vegas office market has demonstrated a consistent upward trajectory in direct asking rents, with sustained growth throughout the year. Closing out the year, Q4 2023 direct asking rents averaged $30.71/sf, marking a 2.2% growth from Q1 2023 at $30.04/sf. Class A direct full-service asking rents in Q4 2023 experienced a notable uptick from last quarter, rising by $0.97/sf, translating to a 3.0% increase. Meanwhile, Class B saw a marginal decrease of $0.11/sf. Class C, witnessed a substantial decline from $18.53/sf in Q3 2023 to $12.62/sf in Q4, representing a significant 31.9% decrease.
Total vacancy rate (%)
In 2023, the Las Vegas office market experienced a notable recovery, rebounding from an elevated vacancy rate in Q2 2023 to a more favorable level by year end. The total vacancy rate reached its peak in Q2 at 15.2%with a modest decrease Q3 2023, followed by a Q4 2023 improvement to 14.4%. This positive shift was influenced by a slight increase in both direct and sublet lease occupancy, a quarter-over-quarter uptick of +0.3% and +0.2%, respectively. In comparison to the national market, Las Vegas continues to perform well (U.S. average vacancy rate was 18.0% in Q4 2023) maintaining a comparatively lower vacancy rate, indicating a more resilient local office market.
Net absorption (sf)
Q4 2023 concluded the year on a positive note for the Las Vegas office market, contributing 129,424 square feet of positive net absorption. The market's outlook at the beginning of 2023 was less optimistic, with Q1 and Q2 of 2023 experiencing -83,581 square feet and -161,393 square feet of negative absorption, respectively. However, the latter half of 2023 witnessed a rebound as both direct and sublet available spaces were filled, resulting in a 1.1% decrease in total availability through year-end. By the end of Q4 2023, the market had 20,987,862 square feet of occupied space, representing an occupancy rate of 86.6%.
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Get in-depth office market reports and insights from commercial real estate experts in the Greater Las Vegas area. Avison Young advisors look at Nevada's commercial real estate activities and the latest Las Vegas statistics to provide you expert market research on the area's office properties.
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