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Las Vegas office market hits the jackpot

Sin City vacancy is a third of San Francisco’s, while one in five U.S. offices sit empty

Las Vegas office market hits the jackpot
LaPour Partners' Jeff LaPour (Illustration by The Real Deal with Getty, naiopnv.org)

Commercial real estate investors are beating the odds in Las Vegas.

With one in five offices across the U.S. sitting empty and leasing struggling across much of the nation, office vacancy in Sin City ticked down to 10.9 percent last quarter, down 0.2 percentage points from the prior period, prodding real estate players to double down on the local strength of the asset class, according to the Las Vegas Sun and figures from CBRE.

It’s a sign there’s far more workspace demand in Las Vegas than across the rest of the country as a whole, including the biggest office markets New York, Chicago and San Francisco. Vacancy rates range from nearly 17 percent in the Big Apple, a record-high 24 percent in the Windy City, all the way to a whopping 34 percent in the Golden City, according to brokerage data on last quarter.

“We’ve been fortunate here in Las Vegas,” Marc Magliarditi of CBRE told the Sun. “That demand has been pretty steady, and I would even say strong … post-pandemic.”

Magliarditi attributed the robust commercial market in the high desert city to a growing number of office tenants, an expansion of professional sports in Southern Nevada and a more suburban market than major cities that rely heavily on public transportation.

The numbers seem to bear him out. The city’s net absorption rose to 103,000 square feet year-to-date last quarter, climbing from a previously negative figure in the prior period, meaning office tenants have now leased more space than they’ve shed this year, according to the CBRE report.

Las Vegas is a growing, tax-friendly town with a good climate — making it enticing for potential office tenants, Jeff LaPour, founder and CEO of LaPour Partners, a commercial developer based in the city, told the Sun.

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The Las Vegas Valley’s growing population, strengthening economy and short supply of offices are driving demand higher, he said.

Employers are also sinking more money into new and improved floors for cubicles, LaPour said, in order to recruit and retain employees after the pandemic. Easy parking, multiple entries into the building, natural light, walkability — these are just a few of the highlights companies seek.

That means mid-sized buildings that are easily navigable. It means the newer, nicer office buildings are going quick, with tenants in Las Vegas willing to pay record rates.

“You have companies that are growing,” LaPour said. “You have companies that are relocating from California or other parts of the country, and they have a need for space.”

“The market’s very good,” he said. “There’s been pent-up demand, and there’s great credit tenants — good absorption. But you have to have a brand new, Class A building that’s desirable. If you don’t, then you’re gonna have trouble.”

— Dana Bartholomew

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