East Las Vegas Valley seeing commercial real estate boom
After years of struggling with high vacancy numbers, a submarket of the east Las Vegas Valley is seeing a commercial development boom.
Since as far back as 2008, the area has struggled to secure commercial tenants but is now showing signs of life, said Steve Neiger, principal and managing broker for Cast Capital Partners, who is working with landlords in the submarket.
A number of new projects are either in the works, currently under construction or recently finished, including Schnitzer Properties’ mixed-use industrial park called Sunset Airport Center 2 on Sunset Road. It has more than 258,000 square feet of new commercial buildings on 17.7 acres.
Neiger said the industrial park is the first commercial development to come to the area — also referred to as East Paradise — in 15 years and has kicked off a building boom. Several new retail businesses, including Eclipse Fitness and Vertica Fitness, have recently opened on Sunset Road. Another office building, Sunset Pecos Plaza, sat largely empty for years and is now 100 percent leased. Additionally, a former Pep Boys on East Sunset Road, which was shuttered for years, will be turned into another gym, he said.
A Dallas, Texas-based company recently spent millions of dollars renovating the retail buildings within the Park 2000 complex, and, in early December, they demolished a vacant building (6440 S. Eastern Ave.) to build a Raising Cane’s, which starts construction in early 2025.
This area of East Las Vegas, which commercial broker Colliers International calls the University East or Central East submarket, is one of the most populated areas in the Las Vegas Valley. According to Colliers third-quarter report for Las Vegas, the submarket has 112,963 residents, an average household income of $76,812 and 9.7 million square feet of occupied retail space.
Neiger said the commercial boom is centered around the Sunset Road corridor, which he describes as east from the airport to Ethel M Chocolate Factory on Cactus Garden Drive along South Mountain Vista Street.
“The Central East and University East submarket was hit hard with retail vacancies during the Great Recession from small spaces all the way up to large-box anchor spaces,” he said. “It was a mature trade area that was planned and developed long before e-commerce was a thing. Between the consequences of e-commerce and the Great Recession, this submarket saw commercial vacancies skyrocket around 2009, and it has taken a long time to recover.”
Commercial market relatively healthy
According to Colliers third-quarter report, Las Vegas Valley’s commercial real estate market is in relatively healthy territory but market forces are continuing to produce headwinds.
Most measures of the Valley’s economy looked good in the third quarter, with only a couple — gaming revenue and existing home sales — showing any weakness,” the report stated. “Twenty years ago, this would have been good news for the Valley’s commercial real estate market. Demand for space in those days was heavily driven by the local economy. Today, that is no longer entirely true.
“While the local economy has grown over the past year, Southern Nevada has experienced negative net absorption in the medical, office and retail sectors, increasing vacancy rates in the industrial sector, and relatively weak demand by developers and investors for land.”
Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.
