Office Space Remains At Premium
The current numbers on vacancy rates and office space are mixed. High-quality Class A is in high demand while Class B lags behind.
High-quality office space showed only a 4.9% vacancy rate during the second quarter of 2006, however, the vacancy rate for all classes increased to 9.4%. According to Applied Analysis, 169,000 square feet of the 182,000 square feet of Class A office space that became available during the second quarter was absorbed by the market. In contrast, only half of the 1 million square feet of Class B office space was absorbed in the second quarter.
Applied Analysis reports that through the first six months of 2006, approximately 2.1 million square feet of office space opened, bringing the Las Vegas Valley inventory to 39.3 million square feet. Another 4.3 million square feet of office space is under construction, with 60% of that located in unincorporated Clark County. Plans are also underway to develop another 5.6 million square feet.
The average asking lease rate continued to grow in the second quarter, reaching $2.21 per square foot. This is up 11.1% from $1.99 per square foot one year ago.