Marcus & Millichap

Las Vegas Retail Investment Forecast

Outlook 2019

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Investors Chasing Returns Flock to Las Vegas; Supply Pressures Elevated

Cycle-high development overshadows robust job growth in Las Vegas. The late-cycle recovery in Las Vegas is firing on all cylinders as the hospitality, construction and government sectors expand payrolls. Fueled by more than 40 million visitors, tourist spending remains upbeat, propelling retail vacancy to just above the lowest levels of the current business cycle. Three years of job growth averaging 3 percent fostered considerable demand for necessity retail and housing, underscored by this year’s delivery of the Mountain’s Edge Master Planned Community and associated retail offerings. The 25-acre project will feature more than 225,000 square feet of retail space. Additionally, Area 15, a bazaar marketplace containing more than 125,000 square feet of retail and event-oriented space, will come online just minutes from the Strip. These projects will help push overall supply growth to a new cycle high while putting supply and demand closer to balance following several years of sharp declines in vacancy. Rent growth will remain exceptional, underpinned by the commuter suburbs to the south and west of the urban core.

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