Las Vegas Office Investment Forecast
Vacancy Falls Well Below Historical Average as Buyers Bet on Submarkets Rich with Professional Tenants
Pipeline yet to reflect level of demand. Office-using employment in Las Vegas improved last year alongside the metro's broader economy, aided by robust population growth that offset the negative impacts of the health crisis. Over the course of 2021, office users bolstered staffs by 20,700 positions, spurring a rebound in leasing activity. The resulting absorption of 1 million square feet last year compressed vacancy below 14 percent, marking the lowest rate in more than a decade. Despite tight conditions, the metro's development pipeline is modest, with less than 1 million square feet slated for 2022 finalization. Preliminary demand for new space from firms including DraftKings and Wynn Design and Development suggests a near-term increase in project proposals is plausible. Nevertheless, office users keen on expanding local footprints or cost-conscious companies that relocate to the metro will have fewer leasing options than in previous years. Steered toward existing buildings, these firms will fuel a level of demand that outpaces supply additions, allowing the pace of rent growth to surpass the prior five-year average.