Office vacancies jump in Las Vegas, reach highest point in history

Las Vegas office vacancies increased during the second quarter.

A report from Applied Analysis showed that commercial property managers in Las Vegas have experienced a rise in office vacancies, and the rate is now its highest all-time.

Total vacancies rose to 25.6 percent during the second quarter, which was an increase from the previous quarter's figure of 25.2 percent, according to the Las Vegas Business Press, citing the report. The gain was the fifth in a row.

Absorption dropped by nearly 127,000 square feet, which took away much of the 199,000 square feet of absorption during the previous quarter, the report showed. Much of this may have been due to a significant decline in area employment. So far, close to 1,800 jobs have been lost during the year, which was a significant change from both 2010 and 2011, which had good growth.

"As a result, continued pricing adjustments are expected on both the for-sale side of the equation as well as from a for-rent perspective," Brian Gordon, principal for Applied Analysis, told the news source.

The average asking rent for Las Vegas office properties declined to $1.93 per square foot, according to the report. The first quarter's figure was $1.94 per square foot, while the second quarter of 2011 had an average of $2.03 per square foot.

"The good news is we're seeing more activity," Chris Beets, investment specialist for Marcus & Millichap brokerage in Las Vegas, explained to the next source. "Buyers are coming to the table and they're not as hesitant as they were six to 12 months ago. Even though prices are depressed, transactional velocity is high."

A Colliers International report showed that the vacancy rate in the city was 23.7 percent. The average asking rent in the report was $1.90 per square foot, while the negative absorption was slightly less than the other report, at 188,302.

However, Colliers found that new office space creation only totaled 4,500 feet, and the total amount of office space considered to be distressed declined by approximately 400,000 square feet during the past year. The firm said that the area needs significant job gains in order to help improve the market in the near future.

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