VEGASNOMICS

It seems like the residential real estate market has grabbed the attention of all the national and local headlines as of late. And why wouldn't it? A single-family home purchased at the January 2020 median price would have already earned you well over $50,000 in equity (on paper).

On the commercial side, most financial media organizations seem to be obsessed with the "work-from-home" versus "come back to the office" debate, which seems to be split down the middle and highly dependent on industry and company size. However, the big story is in the industrial sector, which is seeing hefty increases in rents and CAMs (common area maintenance) for new and 

renewing tenants. Buyers of industrial property have also driven up purchase prices as more companies look for spaces to increase their local inventory and cut down on delivery times to meet rising demand for their goods.

This has driven many tenants with expiring industrial leases that don't require warehouse space to move to vacant office and retail units. But just like any action, there will always be a reaction. In this case, the cost of office and retail space leases are being driven up by this increased demand, particularly on the lower end of the price spectrum. This scenario, coupled with the ongoing threat of inflation and tax hike proposals coming out of Washington, have put landlords on alert, causing them to increase CAMs to staggering rates as well. Case in point, some office and retail spaces that have been asking as low as $1.00 per square foot in rent, which seems like a bargain. have CAMs as high as $0.53 per square foot. That means that a 1,000 square foot space that on the surface looks like it's renting for $1,000 per month is, in actuality, $1,530.

There is still inventory out there, but with Las Vegas set to fully reopen on June 1, spaces are getting snapped up quickly and landlords are making up for 2020 losses, while preparing themselves for continued rising costs.