By Steve Green, Las Vegas Sun and U.S. News Agency / Asian
In a market still suffering from bankruptcies and loan defaults, commercial real estate vacancies remain elevated in the Las Vegas area.
Newly released second-quarter statistics from brokerages show industrial and warehouse vacancies running at about 15 percent, retail vacancies at about 11 percent and office vacancies at about 23.5 percent.
Brokerages offered slightly different statistics in each sector, with some saying the local retail sector is improving and the industrial submarket is holding its own.
The new data suggest the local office market deteriorated in the quarter as rents requested by landlords dipped to a seven-year low.
Brokerage Newmark Grubb Knight Frank put the second-quarter office vacancy rate locally at 23.5 percent, up from 23.4 percent in the first quarter. It said these percentages are in record-high territory and that asking rent on an annual basis fell from $21.76 per square foot to $21.62 — the lowest asked since the third quarter of 2005.
While Commerce Real Estate Solutions calculated the local office vacancy rate had declined from 24.4 percent to 23.9 percent, it confirmed rents fell for the seventh consecutive quarter to $1.84 per square foot on a monthly basis.
Commerce said the local medical office market is suffering as fewer residents are seeking medical care because many are unemployed and don’t have insurance. As a result, doctors and clinics need less space. Vacancies in this sector rose from 19.3 percent to 19.6 percent, the firm said.
Colliers International, in its quarterly report, said office vacancies declined from 24.1 percent to 23.7 percent.
Asking rents have steadily declined from $2.01 per squre foot a month last year to $1.90 this year, Colliers said.
Overbuilding during the boom years in this sector was followed by steep declines in employment among office tenants, meaning they needed less space during the recession.
“When the housing market bubble burst, it took thousands of jobs with it in the financial, real estate and legal sectors,” Colliers said in its report.
Elsewhere, Colliers put the local retail vacancy rate at 11.1 percent during the quarter, down from 11.5 percent during the first quarter.
While that’s an improvement, it’s still up 8 percentage points from the 3.1 percent vacancy rate seen at the start of the recession in the fourth quarter of 2007, Colliers’ statistics show.
Colliers also said that industrial vacancies of 15.3 percent were even with the first quarter.
Commerce Real Estate Solutions said industrial vacancies fell from 15.6 percent to 14.9 percent — marking the first time since 2009 that the rate has been under 15 percent, according to its calculations.
“The industrial vacancy is anticipated to gradually come down as the national and local economy start to show signs of improvement,” Commerce said in its report.
In the meantime, new commercial real estate bankruptcies recently involved the Holsum Lofts on Charleston Boulevard, as well as industrial building owner A.I.P. Limited Partnership and office building owners Northpointe SRC LLC and Gardner Associates General Partnership.
A.I.P. listed assets of $3 million against liabilities of $6.5 million in its July 10 Chapter 11 reorganization filing.
That company owns multi-tenant industrial buildings at 5075 Cameron St. in Las Vegas and at 4500 and 4512 Andrews St. in North Las Vegas.
Northpointe, which has a 6,021-square-foot office building at 4100 N. Martin Luther King Blvd., Building 14, in North Las Vegas, filed for Chapter 11 bankruptcy reorganization on July 18.
The filing came after City National Bank sued the company on April 6 in Clark County District Court over an allegedly defaulted $1.15 million mortgage and initiated foreclosure proceedings.
Gardner Associates, which filed for Chapter 11 reorganization on Sunday, owns a retail property at 1201-1241 E. Charleston Blvd. and an office property at 2055 E. Sahara Ave.
Its bankruptcy filing came after foreclosure proceedings were launched against the Sahara Avenue property, Clark County records show.