Commercial Real Estate Check-Up
It was a tough recession for commercial real estate in Nevada. While it is agreed that the market has improved, some of the segments are coming back quicker than others. There are many factors that are affecting commercial real estate and it is important to learn about them to help you to manage the market better.
Market Challenges
Client expectations are one of the challenges that realtors and brokers are dealing with. Land prices have gone up very rapidly and this makes it difficult for clients to determine if they should buy or wait for the market to stabilize. Trying to determine where the market is in the cycle of high and lows is difficult, but clients expect us to know. In addition, we work with clients all over the world and this makes the transactions and decision-making more complex.
Healthiest Commercial Segment
Apartment complexes are one of the hottest markets right now. Clients have to decide when to sell to get the most from their property. As soon as properties are brought to market, they are sold, so there are not a lot of choices out there. While the market is healthy, if you are a broker who is selling apartments, you have nothing to sell. It has two sides to it.
The industrial market is also very healthy. There is about 5 million square feet that is under construction or will be by mid-2016 in Southern Nevada. Tenants are still coming in to fill the space, so that is a good indicator and a reason why new construction is underway and continues to be planned.
What About Retail?
In the retail segment of the market, Las Vegas is seeing mixed results. Some online retailers are not moving into brick and mortar stores, such as Duluth Trading and Sierra Trading Company, which is a welcome sight. Retailers are upping their game and this helps the industrial segment of the market, as industrial space is being used by major retailers as fulfillment centers, rather than having huge retail spaces. This is a transition in how business is done for retailers, as many believed that online shopping would overcome brick and mortar.
Consumer Patterns Changing
How and why consumers shop is changing. Some people choose to shop and eat with companies that take care of their employees or who espouse more environmentally friendly products or methods. Computers cannot make people passionate about something, but people can, which is why how retail markets to their clients will have to change.
Las Vegas commercial real estate has to stay up to date with the trends of several market segments. From apartments to offices to industrial spaces to retail, all of these go into making Las Vegas real estate as a whole stronger and more able to overcome the recession.