Ryan Martin, SIOR, CCIM / MDL Group
The West Central Submarket, one of the more mature submarkets in the Las Vegas Valley, is encompassed by Rainbow Blvd. acting as the western boundary line and I-15 as the eastern boundary line, and everything south of US-95 (north boundary) to Tropicana Blvd. (south boundary).
The submarket hasn’t seen any new construction for some time; therefore, maintaining roughly 5.2 million SF of office space, which represents approximately 11.5% of the total office space tracked in the Las Vegas Valley.
The vacancy rate in this submarket has trended down just slightly year-over-year, reporting a 11.2% vacancy rate of Q2 2020. There is very little Class A office space in this submarket (157,624 SF) consisting of only 3% of the inventory with no new construction on the horizon. If you look at the overall vacancy rate in Q2 2020, Class B reported 7.3% while Class C was 13.5%; posting net absorption at the same time of -28,772 SF for the submarket.
Asking rates in the West Central Submarket have increased by 2.6% year-over-year for an average full service gross rate of $1.92 PSF (based on Class A $2.42, B $2.19, & C $1.79), and all three classes continue to rise year-over-year.
One of the largest sales this year was in the West Central Submarket when Moonwater Capital purchased the NV Energy building at 6226 W. Sahara Ave., 282,000 SF for $33.35M ($118/SF). NV Energy also sold 3065 S. Jones Blvd. (18,962 SF) for $4.39M ($231/SF), which was at a 6.84% cap rate.
Some of the notable lease transactions completed in the West Central Submarket include: GSA’s lease of 21,290 SF at 2324 W. Charleston Blvd., and The Crossing Church’s lease of 40,351 SF at 3535 W. Sahara Ave.
The Central West Submarket will continue to undergo redevelopment, specifically directed towards the UNLV Medical District and the continued campus expansion. The West Central Submarket is a resilient submarket reflecting that location still plays a key role when choosing real estate.