Page 14 - Las Vegas LVQR Market Research Report Q1 2024

Colliers 3
Office
Las Vegas 24Q1

Units sized 1 to 2,500 sf saw vacancy increase by 115,407 sf over Office Vacancy by Unit Size Range
the past four quarters. Over the same period, units sized 25,000 sf 24q1 (000's of square feet)
or larger saw vacancy decrease by 357,469 sf. Smaller units were
generally more popular during the post-lockdown recovery, but
demand for larger units has increased over the past two quarters.
Rents 609.9
973.4 0 - 2.5k SF
The weighted average asking rental rate for office space in
Southern Nevada was $2.53 psf FSG this quarter, $0.03 higher
2.5 - 5k SF
than one year ago. The fourth quarter of 2023 saw the highest
office asking rental rate yet recorded in Southern Nevada, at sf
$2.57 psf. The Southwest was the Valley’s most expensive 1,722.8 1,022.7 5k - 10k SF
submarket, at $3.30 psf FSG. The least expensive submarket was
Downtown, at $2.08 psf FSG. 10k - 25k SF
Sales

This quarter, Southern Nevada’s office market recorded an 1,228.2 25k SF +
investment sales volume of $42.3 million in 8 sales totaling
184,906 sf with an average sales price of $228.93 psf. The average
cap rate this quarter was 6.8%. Investment sales volume
Source: Colliers International
decreased for a second consecutive quarter, but did have a
decrease comparable to owner/user sales.
Owner/user sales had a sales volume of $24.3 million in 11 sales Forecast
totaling 92,871 sf with an average sales price of $261.68.
Owner/user sales trended up through most of 2023, but fell Through most of 2023, Southern Nevada’s office market put up
dramatically during the fourth quarter. This quarter saw an healthy numbers in terms of vacancy and asking rental rates. The
quarterly improvement, but remained below 2023 levels. third quarter of 2023 saw significant negative net absorption due
to the purchase of a private office park by the State of Nevada,
thus removing it from our stats. Aside from that data point,
Office Vacancy By Class
Southern Nevada looked as though it were bucking the national
C B A trend of decreased demand for office space.
30.0% The fourth quarter of 2023 saw weak demand for office, and this
was amplified in the first quarter of 2024, with -118,759 sf of net
25.0% absorption, mostly in class B office buildings. From 2021 to mid-
2022, class B office posted a total of 905,080 sf of net absorption
20.0%
and was a strong point of the local office market. Since mid-2022,
though, class B office had -573,131 sf of net absorption while
15.0%
asking rental rates increased by 8.5%. Over the same period, class
A office had 654,119 sf of net absorption and 2.5% rent growth.
10.0%
The last two years of data suggest that class B landlords need to
5.0% focus on their competitivity with class A buildings, specifically in
regards to price. The challenges to the office market, from work-
0.0% at-home to smaller, more efficient work forces, is well known and
23q1 23q2 23q3 23q4 24q1 must not be ignored by landlords.
Source: Colliers International

Colliers | Las Vegas | 24Q1 | Office Report