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LAS VEGAS COMMERCIAL REAL ESTATE ROUNDUP Presented by: Presented to: October 14, 2015
LAS VEGASCOMMERCIAL REAL ESTATE
ROUNDUP
Presented by:
Presented to:
October 14, 2015
WHY WE’RE HERE
2
Source: Bureau of Labor Statistics.
Peak to Trough % Job Change: 1948-2001
Nevada job recovery: Previous 10 Recessions
Nevada
US
3
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99
% C
hang
e in
Jobs
(Pea
k to
Tro
ugh)
Number of Months After Peak Employment
1948 1953 1957 1960 19691974 1980 1981 1990 2001
Source: Bureau of Labor Statistics.
Peak to Trough % Job Change: 1948 to Present
Nevada job recovery from Great Recession (after 99 months)
Nevada
US
4
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99
% C
hang
e in
Jobs
(Pea
k to
Tro
ugh)
Number of Months After Peak Employment
1948 1953 1957 1960 1969 19741980 1981 1990 2001 2007 US 2007
US Jobs
NV Jobs
PART 1: THE SOUTHERNNEVADA JOB MARKET
5
JobsAbsorptionVacancyRents
Source: Bureau of Labor Statistics.
Rate of Nevada & Las Vegas MSA Job Recovery, by Jobs: 1/2007-8/2015
Las Vegas job recovery 88% complete,full recovery likely within 9 months
6
1,293,1001,263,600
931,100
916,300
750,000
850,000
950,000
1,050,000
1,150,000
1,250,000
1,350,000
# of
Non
-Far
m Jo
bs
NevadaLas Vegas
1,111,500
181,600 Total Jobs Lost in Nevada
798,200
132,900 Total Jobs Lost in Las Vegas
Aug-15:29,000 Jobs to Go for Recovery
Aug-15:16,200 Jobs to Go for Recovery
Source: Bureau of Labor Statistics.
Nevada Job Growth & Headline Unemployment Rate: 8/2006-8/2015
Unemployment continues to drop, job growth slowing but good
7
-15%
-10%
-5%
0%
5%
10%
15%
Perc
ent (
%)
Axis Title
Job Growth Unemp. Rate
Aug-15 Job Gr: +3.4%
Aug-15 Unemp: 7.1%
Source: Bureau of Labor Statistics.
Nevada U-3 & U-6 Rates: Q2, 2010-Q2, 2015
U-6 rate shows high share of forced part-time workers in Nevada
8
13.5
13.8
14.4
14.2
13.6
13.5
13.112.7
12.311.9
11.010.8
10.49.7
9.89.4
8.88.3
7.7
7.6
7.3
21.5
22.323.6
23.7
23.3
23.3
22.722.3
22.121.4
20.319.6
19.018.1
18.117.4
16.215.9
15.3
15.3
15.2
0
5
10
15
20
25
Perc
ent (
%)
U3 U6
Source: Bureau of Labor Statistics.
US, Nevada & Las Vegas MSA Average Weekly Hours: 8/2009-8/2015
Las Vegas MSA work hours continue to slide as unemployment rate improves
9
32
33
34
35
36
37
Aver
age
Wee
kly
Hour
s Wor
ked
United States
Nevada
Las Vegas MSA
US: Aug-15: 34.6
LV: Aug-15: 33.2
NV: Aug-15: 33.5
Source: Bureau of Labor Statistics.
Las Vegas MSA Average Weekly Earnings: 8/2009-8/2015
Las Vegas MSA earnings rising with improving unemployment rate
10
$550
$600
$650
$700
$750
Aver
age
Wee
kly
Earn
ings
Aug-15 Nominal: $715
Nominal Avg. Weekly Earnings
Inflation-Adjusted (2007$) Avg. Weekly Earnings
Aug-15 Real: $634
Source: Nevada Department of Taxation; calculated by RCG Economics.
Clark County Total Taxable Retail Sales (“TRS”) vs. Traditional Retailer TRS: 7/2013-7/2015
Retail sales holding steady, with slight drop-off going into summer
11
4.8% 5.2%5.8%
7.9%
8.1% 8.2% 7.2%
3.6%
4.7% 4.9%5.3%
4.7%4.5% 4.4%
0%
2%
4%
6%
8%
10%
12%
Taxa
ble
Reta
il Sa
les
Clark County TRS
CC Traditional Retailers TRS
PART 2: THE COMMERCIALREAL ESTATE MARKETS
12
JobsAbsorptionVacancyRents
*Natural resources, construction, manufacturing, and transportation & warehousing industries.Source: Bureau of Labor Statistics; calculated by RCG Economics.
Las Vegas MSA Industrial-Using* Jobs & Growth: 8/2014-8/2015
Industrial jobs still growing but rate slowing, possible due lack of space
13
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
118,000
120,000
122,000
124,000
126,000
128,000
130,000
132,000
134,000
Perc
ent G
row
th
Indu
stria
l-Usi
ng Jo
bs
Industrial Jobs YOY % Gr.
*Information, financial activities, professional & business and health care & social assistance. Source: Bureau of Labor Statistics; calculated by RCG Economics.
Las Vegas MSA Office-Using* Jobs & Growth: 8/2014-8/2015
2015 office job growth generally trending upward after slow start
14
0%
1%
2%
3%
4%
5%
6%
238,000
240,000
242,000
244,000
246,000
248,000
250,000
252,000
254,000
Perc
ent G
row
th
Off
ice-
Usi
ng Jo
bs
Office Jobs YOY % Gr.
Source: Bureau of Labor Statistics; calculated by RCG Economics.
Las Vegas MSA Retail-Using Jobs & Growth: 8/2014-8/2015
Retail job growth falling big during summer doldrums; will pick-up in holidays
15
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
96,000
98,000
100,000
102,000
104,000
106,000
108,000
110,000
Perc
ent G
row
th
Reta
il-U
sing
Jobs
Retail Jobs YOY % Gr.
Source: RCG Economics.
Las Vegas Valley Industrial YOY Absorption & Completions: Q2, 2013-Q2, 2015
Industrial absorption over 4M SF for 7 straight quarters
16
2,10
5,81
8
3,77
5,92
2
4,62
6,07
4
4,76
6,83
1
5,01
1,93
4
4,58
5,83
6
5,23
3,36
5
4,98
0,85
6
4,27
5,31
0
449,
473
801,
473
801,
473
773,
473
920,
000
607,
490
607,
490
586,
992
555,
195
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
SF
Net Absorption Completions
Source: RCG Economics.
Las Vegas Valley Spec Office YOY Absorption & Completions: Q2, 2013-Q2, 2015
Office absorption declined 3 quarters in a row
17
235,
712
-100
,701
129,
477
593,
814
826,
613
1,62
0,09
9
1,23
0,73
7
954,
786
754,
556
67,6
92
26,0
00
81,0
00
126,
700
126,
700
270,
700
225,
700
392,
868
392,
868
-800,000
-300,000
200,000
700,000
1,200,000
1,700,000
2,200,000
SF
Net Absorption Completions
Source: RCG Economics.
Las Vegas Valley Anch. Retail YOY Absorption & Completions: Q2, 2013-Q2, 2015
Retail absorption effectively zero over last 2 quarters
18
698,
027
419,
235
484,
504
436,
903
350,
775
594,
326
320,
789
24,5
31
1,64
4
0 0 0 0 0 0
222,
000
222,
000
222,
000
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
SF
Net Absorption Completions
Source: RCG Economics.
Las Vegas Valley Industrial Vacancy Rate, by Product: Q2, 2014-Q2, 2015
All Industrial space types experienced improvement in vacancy rate
19
0%
5%
10%
15%
20%
25%
Vaca
ncy
Rate
Q2 '14
Q2 '15
Source: RCG Economics.
Las Vegas Valley Industrial Vacancy Rate, by Submarket: Q2, 2014-Q2, 2015
North Las Vegas, Henderson leading submarkets in occupied Industrial space
20
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Vaca
ncy
Rate
Q2 '14
Q2 '15
Source: RCG Economics.
Las Vegas Valley Spec Office Vacancy Rate, by Product: Q2, 2014-Q2, 2015
Class C driving improvement inSpec Office vacancy rate
21
0%
5%
10%
15%
20%
25%
30%
35%
40%
All Prod. Class A Class B Class C Medical
Vaca
ncy
Rate
Q2 '14
Q2 '15
Source: RCG Economics.
Las Vegas Valley Spec Office Vacancy Rate, by Submarket: Q2, 2014-Q2, 2015
Class C-heavy NLV doing well, Class A-heavy East LV (Hughes Center) lagging
22
0%
5%
10%
15%
20%
25%
30%
35%
Vaca
ncy
Rate
Q2 '14
Q2 '15
Source: RCG Economics.
Las Vegas Valley Anch. Retail Vacancy Rate, by Product: Q2, 2014-Q2, 2015
Improvement in Retail vacancy rate stall, Power Centers strengthening
23
0%
4%
8%
12%
16%
All Prod. Power Community Neighborhood
Vaca
ncy
Rate
Q2 '14
Q2 '15
Source: RCG Economics.
Las Vegas Valley Anch. Retail Vacancy Rate, by Submarket: Q2, 2014-Q2, 2015
NE, NW & SW markets healthy, while Downtown, University East struggling
24
0%
4%
8%
12%
16%
20%
Vaca
ncy
Rate
Q2 '14
Q2 '15
Source: RCG Economics.
Las Vegas Valley Industrial Vacancy Rate & Rents: Q2, 2014-Q2, 2015
Industrial rents rising slowly as vacancy rate drops below10%; quality space gone
25
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
$1.00
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
$ PS
F Pe
r Mon
th (N
NN
)
% V
acan
t
Vacancy - Q2-15 = 6.2%
Asking Rents - Q2-15 = $0.66 PSF/Mo.
Source: RCG Economics.
Las Vegas Valley Spec Office Vacancy Rate & Rents: Q2, 2014-Q2, 2015
Office rents roughly stable with a high but stable vacancy rate
26
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
0%
5%
10%
15%
20%
25%
30%
$ PS
F Pe
r Mon
th (F
SG)
% V
acan
t
Vacancy - Q2-15 = 21.6%
Asking Rents - Q2-15 = $2.14 PSF/Mo.
Source: RCG Economics.
Las Vegas Valley Anch. Retail Vacancy Rate & Rents: Q2, 2014-Q2, 2015
Retail rents leveling off; vacancy rate stabilizing at ~11.5%
27
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
$ PS
F Pe
r Mon
th (N
NN
)
% V
acan
t
Vacancy - Q2-15 = 11.9%
Asking Rents - Q2-15 = $1.29 PSF/Mo.
Source: RCG Economics.
Las Vegas Valley Industrial Completions as % of Inventory: Q2, 2014-Q2, 2015
Industrial completions picking up; more space on the way
28
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Com
plet
ions
as %
of I
nven
tory
Source: RCG Economics.
Las Vegas Valley Spec Office Completions as % of Inventory: Q2, 2014-Q2, 2015
New Office completions started recently,some targeted growth ahead
29
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
Com
plet
ions
as %
of I
nven
tory
Source: RCG Economics.
Las Vegas Valley Anch. Retail Completions as % of Inventory: Q2, 2014-Q2, 2015
Retail completions near zero, flickers of hope on horizon
30
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Com
plet
ions
as %
of I
nven
tory
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