Jake Higgins / CBRE
The Airport Submarket is the smallest of the primary submarkets consisting of about 14 million SF or 11% of the overall market. The Airport is one of the healthiest submarkets in Las Vegas based on vacancy. As of Q2 2020, vacancy has remained at a record low of 1.6%.
The Airport Submarket has been one of the least active in terms of development during this cycle due to land constraints, but there is currently 151,200 SF under construction and 222,600 SF of planned construction in this submarket. Active developers include Dermody Properties and Harsch Investment Properties who are building light distribution and midbay product for lease.
As of Q2 2020, the Airport submarket has experienced 55,109 SF of positive net absorption, again due to the limited availability of product in this land-constrained submarket. As a result, lease rates continue to remain strong even during COVID-19. Landlords are asking $0.85-$0.95 PSF NNN for midbay product from 5,000-20,000 SF and $0.80 PSF NNN for new light industrial product from 20,000 SF and above. Asking prices for flex rates currently range between $0.95-$1.15 PSF NNN depending on size and overall build out.
There have been 2 significant sales transactions in 2020. The first included a 6-building portfolio within Hughes Airport Center totaling 425,752 SF of multi-tenant flex/industrial buildings. This project sold at the beginning of this year for a record cap rate and pricing. The second major sales transaction was Spencer Airport Center, which totals 103,613 SF within 4 multi-tenant freestanding buildings.
Given its central location in the Las Vegas Valley, close proximity to the resort corridor and McCarran International Airport, and easy access to the convention center, the Airport Submarket continues to remain a preferred location for gaming-related companies, convention companies, and service-related companies for the Las Vegas community. Its immediate access to the I-15 & I-215 and proximity to numerous amenities will continue to support its position as a premier submarket in Las Vegas even throughout this global pandemic.