Las Vegas office market report

Direct asking rents for Las Vegas office saw growth for a fifth consecutive quarter – jumping $0.38/sf (1.3%) from $30.08 to $30.46 during the quarter.

In Q2, “class A” office space saw the largest jump in asking rents during the quarter. However, the opposite was seen in the third quarter.

In Q3, “Class B & C” office space saw the largest rent growth quarter-over-quarter, respectively increasing by 2.4% ($30.42/sf) and 1.4% ($18.53/sf) – while “class A” office space saw rents fall by 2.1%, ending the quarter with an average asking rate of $31.18.

Office vacancy saw a modest decrease of 0.4% in Q3, ending the quarter with a total vacancy rate of 15.3% -  breaking the streak of back-to-back quarterly increases in vacancy experienced in Q1 and Q2.

The direct vacancy rate decreased 50bps from 13.9% in Q2 to 13.4% in Q3, while sublet vacancy increased by 10 basis points over the same period, ending the quarter at 1.9%.

The decrease in total vacancy rate can be attributed mainly to the high rate of absorption experienced in the evolving suburban office markets of West and Southwest Las Vegas.

Capital markets activity for Las Vegas office rebounded significantly with $106,860,488 transacted in the third quarter, which is only $100k short of the combined transaction volume recorded over the previous three quarters ($106,973,584).

Aside from transaction volume by dollar amount, the number of completed transactions and average price per square foot also saw significant increases, with completed transactions jumping from 4 in Q2 to 12 in Q3, and average price per square foot up 6.7% quarter-over-quarter – ending the quarter at $224/sf.