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Q1 2016

Las VegasResearch & Forecast Report

Las VegasEconomic Review

22 Las Vegas Research & Forecast Report | Q1 2016 | Economic Review | Colliers International

Glossary

Industrial DefinitionsIncubator: Multi-tenant buildings without dock-high loading doors that have a parking ratio lower than 3.5/1,000 square

feet and bay sizes lower than 3,500 square feet.

Light Distribution: Multi- or single-tenant buildings that include dock-high loading doors and have bay sizes of less than 15,000 square feet.

Light Industrial: Multi- or single-tenant buildings without dock-high loading doors that have a parking ratio lower than 3.5/1,000 square feet and, in the case of multi-tenant buildings, bay sizes of at least 3,500 square feet.

Flex: Multi- or single-tenant buildings without dock-high loading doors with parking ratios in excess of 3.5/1,000 square feet.

Warehouse/Distribution: Multi- or single-tenant buildings that include dock-high loading doors and have bay sizes of at least 15,000 square feet.

Office DefinitionsClass A Office: Buildings with steel frame construction, high end exterior finish, distinctive lobbies featuring upgraded

finishes, amenities including on-site security, state-of-the-art communications and data infrastructure and covered parking. Class A buildings are usually multi-story.

Class B Office: Buildings with steel frame, reinforced concrete or concrete tilt-up construction. Class B buildings contain common bathrooms and hallways, and their lobbies may have granite and hardwood detailing. Class B buildings are often multi-story.

Class C Office: Buildings of wood frame construction. Class C buildings are often garden-style and are built around court-yards.

Retail DefinitionsCommunity Center: Retail centers anchored by supermarkets, drug stores and discount department stores. Tenants include off-

price retailers selling apparel, home improvements/furnishings, toys, electronics or sporting goods.

Neighborhood Center: Retail centers anchored by supermarkets and drug stores. Neighborhood centers are intended for convenience shopping for day-to-day needs of consumers.

Power Center: Retail centers dominated by several large anchors including discount department stores, off-price stores, warehouse clubs or “category killers”. Power centers generally inline space.

Strip Center: Unanchored retail centers that are 20,000 SF in size or larger.

Multifamily DefinitionsClass A Multifamily: Buildings constructed in the last 5 years

Class B/C Multifamily: Buildings constructed more than 5 years ago

General DefinitionsVacant SF: Space in a building that is unoccupied and offered for lease by the owner of the company.

Sublease SF: Space in a building that is offered for sublease by the primary tenant. This space may or may not be occupied.

Net Absorption: Difference in occupied square footage from one period to another.

This report and other research materials may be found on our website at www.colliers.com/LasVegas. This quarterly report is a research document of Colliers International | Las Vegas. Questions related to information herein should be directed to the Research Department at +1 702 836 3781. Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. ©2015 Colliers International


Economic ReviewWhat Comes Next?

4The economic growth experienced by Southern Nevada in 2015 looks continued in the first quarter of 2016.

Industrial ReviewA Good Start, But …

8After a very strong 2015, the first quarter of 2016 seems to be a continuation of the trend of high net absorption.

Office ReviewOffice Picks Up Steam

14Over the past three years, and despite a few bad quarters, Southern Nevada’s office market has managed a pretty strong recovery.

Retail ReviewMore Expasion for Retail Market

19Southern Nevada’s retail market appeared to be back in growth mode. The market managed 285,353 square feet of net absorption in the first quarter of 2016, more than one quarter ago and also more than one year ago.

MultifamilyVacancy Edges Up on New Completions

25According to statistics provided by REIS, multifamily vacancy in Southern Nevada increased in the fourth quarter of 2015 (the most recent quarter of available data), ending a three year long streak.

Medical OfficeMedical Growth … But Not in Medical Office

30Southern Nevada’s medical office market managed a positive 2015 due to strong positive net absorption in the first half of the year, and despite negative net absorption in the last half of the year.

HospitalityHospitality Stays Strong

352016 has only just begun, but so far Southern Nevada’s hospitality market appears to have extended its winning streak.

LandThe Calm Before the Storm

40In terms of acreage sold, the first quarter of 2016 was the best first quarter Southern Nevada has had in five years, with 1,224 acres sold in 87 sales.

Table of Contents

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Clark County Economic DataCurrent Year Ago

Jobs (1000s) (Jan. 2016) 981.2 948.4

Visitor Volume YTD (Jan. 2016) 3.5 MM 3.4 MM

Gaming Revenue YTD (Jan. 2016) $811 MM $838 MM

Taxable Sales YTD (Dec. 2015) $38.6 BB $36.1 BB

Commercial Occupancy (Q1-2016) 91.0% 89.5%

Source: The Center for Business & Economic Research, UNLV; Colliers International

Recovery Index(Year -Over-Year)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

New Home Sales

Commercial Occupancy

Gaming Revenue

Visitor Volume In-Migration Employment Taxable Sales Port Traffic LA Recovery Index

Recovery Index (Year-Over-Year)

Dec 2014 Dec 2015

Jan 2005 = 100

What Comes Next?

Research & Forecast Report

LAS VEGAS | ECONOMIC REVIEWQ1 2016

> Southern Nevada economy grew in Q4

> Taxable sale growth and job growth was strong

> Hospitality and construction sectors are driving economy

The economic growth experienced by Southern Nevada in 2015 looks continued in the first quarter of 2016. Led by continued growth in taxable sales and employment, the Valley’s economy, despite some lingering areas of weakness, is beginning to transition from recovery to expansion.

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Employment Growth (January 2015 - January 2016)

-3,7::

-4::

-1::

-1::

1,:::

1,:::

1,1::

4,1::

6,:::

6,5::

7,7::

9,5::

-6,::: -4,::: -2,::: : 2,::: 4,::: 6,::: 8,::: 1:,::: 12,:::

Leisure/Hospitality

Other Services

Natural Resources

Information

Financial Activities

Education

Manufacturing

Government

Construction

Professional/Business Services

Health Care/Social Assistance

Trade/Transportation/Utilities

Employment Change(Jan 2:15 - Jan 2:16)

Southern Nevada CommercialReal Estate Recovery Index

60.0

70.0

80.0

90.0

100.0

110.0

120.0

Jun 1996 Nov 1996 Apr 1997 Sep 1997 Feb 1998 Jul 1998 Dec 1998 M

ay 1999 Oct 1999 M

ar 2000 Aug 2000 Jan 2001 Jun 2001 Nov 2001 Apr 2002 Sep 2002 Feb 2003 Jul 2003 Dec 2003 M

ay 2004 Oct 2004 M


ay 2009 Oct 2009 M


ay 2014 Oct 2014 M

ar 2015 Aug 2015 Jan 2014

Colliers International Southern Nevada Commercial Real Estate Recovery Index

(Jan 2005 = 100)

The Old Growth Rate

The New Growth Rate


Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January 2015. The national unemployment figure was 4.9 percent in February 2016, down from 5.5 percent in February 2015. The national labor force participation rate edged up to 62.9 percent, a 0.1 point increase from February 2015.

Since January 2015, total employment in Southern Nevada increased by 32,600 jobs, slightly more than were added between January 2014 and January 2015. On a year-over-year basis, the majority of new jobs were in trade, transportation and warehousing (+9,500 jobs), health care and social assistance (+7,700 jobs), professional and business services (+6,500 jobs), construction (+6,000 jobs) and government (+4,100 jobs). Job expansions were also experienced in the manufacturing (+1,100 jobs), education (+1,000 jobs) and financial activities (+1,000 jobs) sectors. Job losses occurred in information (-100 jobs), natural resources (-100 jobs), other services (-400 jobs) and leisure and hospitality (-3,700 jobs). The job losses in leisure and hospitality are due to the closure of some older resorts for redevelopment rather than a downturn in the industry. In 2015, job growth was dominated by the leisure and hospitality and construction sectors. It is now more diversified, though it is likely that construction and hospitality will reassert themselves as dominant job sectors in the near future.

While the current construction employment of 53,300 jobs lags well behind the 111,300 construction jobs the Valley had in August of 2006, it has expanded quite a bit since the low of 34,800 construction jobs in early 2012. The industrial and multifamily sectors are the key real estate stimulators of new construction in the Valley, but infrastructure is currently creating the most construction jobs in Southern Nevada, and important infrastructure projects are planned to continue for the next year at least, Project Neon being foremost among them. The coming years will also see construction at the Cadence MPC in Henderson and the ResortsWorld resort on the Las Vegas “Strip”, as well as additional industrial, multifamily and retail projects.

Southern Nevada was among the fastest growing metropolitan areas in the United States in the decades that preceded the Great Recession, but population growth during the Not-So-Great Recovery has been slow. Factors for this slowing included a stagnant job market, which is now reversing itself, and millions of Americans with mortgage problems who were unable to sell their homes and move west. According to data provided by the Nevada Department of Motor Vehicles, the average number of out-of-state driver’s licenses turned in each month was 5,130 in 2015. This was lower than the average of 5,324 licenses per month turned in in 2014 and 5,481 licenses per month turned in in 2013. The initial bounce back in growth experienced in 2013 from the lows of 2011 and 2012 appears to have reversed itself back into a slow slide. New home sales are equally unimpressive in Southern Nevada over the past three years, and increases in new home prices and multifamily rental rates might be partially to blame. A low-growth Southern Nevada is unfamiliar to many long-time business people in the area, and will require a reappraisal of old methods and assumptions. This is especially true for the commercial real estate market.


Southern Nevada’s hospitality sector continued to see improved visitor volume in the opening month of 2016, as it had throughout 2015. This higher visitor volume is coupled with reductions in the Valley’s room inventory due primarily to the closure of the venerable 2,075-room Riviera Hotel & Casino. The Riviera was purchased last year by the Las Vegas Convention & Visitors Authority and is slated for demolition to make room for an expansion of their convention facilities. A total of 373 rooms were removed from inventory in 2014, with three smaller properties being demolished. With more visitors and fewer rooms, the industry is enjoying higher occupancy and room rates.

Commercial real estate investment sales volume in 2015 reached $1.65 billion in 230 sales totaling 9.6 million square feet at an average price per square foot (ppsf) of $172.42. Compare this to 2014, when sales volume ended the year at $1.36 billion in 280 sales totaling 9.1 million square feet at an average ppsf of $149.47. This shows a small shift to larger property sales in 2015 than in 2014, and confirms that commercial investment sales have now recovered from the Great Recession. So far in 2016, investment sales volume was $241 million in 37 sales totaling 1.3 million square feet at an average ppsf of $181.77. This is down slightly from the first quarters of 2014 and 2015, but no so much as to cause worry. Sale volume growth in 2015 was highest for single-tenant retail properties (+43 percent) and shopping centers (+24.2 percent), but was also positive for office properties (+13.9 percent) and industrial properties (+8.5 percent). Modest rate hikes by the Fed could reduce commercial real estate investment activity slightly in 2016 compared to 2015. Cap rates averaged 7.4 percent in 2015.

Recovery IndexThe recovery index managed six straight months of growth, from Jun 2015 to November 2015, before taking a small dip in December 2015. The index increased again in January 2016, reaching 99.7, which places the current economy very near where it was in January 2005. To put this another way, it has taken Southern Nevada 11 years to get back to where it was during the boom of the early 2000’s.

To say, though, that the economy is back to where it was is not quite right. The economy is back to its heights in aggregate, but many measures of the local economy are not back to their old heights, and many others are well ahead of where they once were. New home sales, for example, is a mere shadow of its former self, and it has shown very little recovery since the Great Recession. Commercial occupancy, gaming revenue, out-of-state drivers license count and port traffic in Los Angeles are are below their heights, though generally ahead of where they were in January 2005. New home sales and drivers license count are well below where they were in January 2005, and the population growth they represent was a key ingredient of the old economic order of Southern Nevada. On the other side of the coin, visitor volume and taxable sales are both at or ahead of their heights in the early 2000’s. This, to some extent, represents the new economic order of Southern Nevada, which is more reliant on commerce and tourism than it was in the past.

Economic Statistics

Las Vegas – First Quarter 2016

TYPE MARCH 2016 DECEMBER 2015 MARCH 2015 2016 AVERAGE 2015 AVERAGE MONTHLY GROWTH

ANNUAL GROWTH

2015 TO 2016 GROWTH

(AVERAGE)

EMPLOYMENT DATAU.S. Employment 143,774,000 143,242,000 141,178,000 143,550,667 141,960,167 0.4% 1.8% 1.1%

U.S. Unemployment Rate 5.0% 5.0% 5.5% 4.9% 5.3% 0.0% -9.1% -6.6%

Las Vegas MSAEmployment

981,200 975,700 1,306,800 922,100 908,558 0.6% -24.9% 1.5%

Las Vegas MSA Unemployment Rate

6.5% 6.2% 7.2% 6.5% 6.9% 4.8% -9.7% -5.3%

Las Vegas MSA Construction Employment

53,900 53,700 49,600 53,600 51,500 0.4% 8.7% 4.1%

Las Vegas MSA Hospitality Employment

276,500 284,400 282,700 276,300 286,850 -2.8% -2.2% -3.7%

HOUSING/CONSTRUCTION DATANew Home Sales 483 698 543 433 564 -30.8% -11.0% -23.4%

New Home Median Price $312,928 $310,814 $312,204 $311,053 $310,451 0.7% 0.2% 0.2%

Existing Home Sales 2,783 2,679 2,707 2,258 2,573 3.9% 2.8% -12.2%

Existing Home Median Price $220,000 $217,000 $205,000 $219,783 $214,068 1.4% 7.3% 2.7%

Residential Permits 737 827 893 732 884 -10.9% -17.5% -17.3%

Residential Permit Value $96,569,230 $94,940,590 $103,107,547 $96,569,230 $102,255,895 1.7% -6.3% -5.6%

Commercial Permits 23 35 25 23 27 -34.3% -8.0% -15.9%

Commercial Permit Value $34,404,001 $17,265,296 $32,384,944 $1,495,826 $45,905,940 99.3% 6.2% -96.7%

HOSPITALITY DATAVisitor Volume 3,328,116 3,228,768 3,624,587 3,399,925 3,526,018 3.1% -8.2% -3.6%

Gaming Revenue $863,308,000 $864,349,000 $826,410,000 $836,920,000 $801,371,923 -0.1% 4.5% 4.4%

Room Inventory 149,262 149,213 150,255 149,238 148,862 0.0% -0.7% 0.3%

Hotel/Motel Occupancy 87.2% 78.5% 88.6% 86.0% 87.7% 11.1% -1.6% -2.0%

Passengers(McCarran Int'l Airport)

3,443,923 3,669,005 3,851,199 3,497,810 3,778,734 -6.1% -10.6% -7.4%

Convention Attendance 607,787 234,668 551,793 687,757 475,859 159.0% 10.1% 44.5%

The information contained in this report was provided by sources deemed to be reliable, however, no guarantee is made as to the accuracy or reliability.As new, corrected or updated information is obtained, it is incorporated into both current and historical data, which may invalidate comparison to previously issued reports.


Summary StatisticsQ1 2016 Las Vegas Market Q1-2016 Q4-2015 Q1-2015

Vacancy Rate 5.6% 5.5% 7.5%

Asking Rent (PSF, NNN) $0.65 $0.64 $0.57

Net Absorption (SF) 900,732 575,402 898,491

New Completions (SF) 1,104,060 173,608 0

Market TrendsRelative to prior period Market Q1 2016 Market Q2 2016*

Vacancy

Net Absorption

Completions

Rental Rate

*Projected

Historical Vacancy Rates and Asking Lease Rates

$0.50

$0.53

$0.56

$0.59

$0.62

$0.65

$0.68

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

1 Q 2014

2 Q 2014

3 Q 2014

4 Q 2014

1 Q 2015

2 Q 2015

3 Q 2015

4 Q 2015

1 Q 2016

Vacancy Asking Rental Rate

Overall Asking RentsPer Square Foot Previous Quarter Current Quarter

Warehouse/Distribution $0.54 $0.53

Light Distribution $0.57 $0.58

Light Industrial $0.64 $0.69

Incubator $0.70 $0.73

Flex $0.86 $0.94“We think demand will hold steady for the industrial market in 2016.”

TRANSPORTIONTaxable Sales

-22.8INDUSTRIALEmployment

+6.3%

RESIDENTIALPermit Value

-74.8%

Economic Indicators

A Good Start, But …


LAS VEGAS | INDUSTRIALQ1 2016

> 2016 got off to a good start in terms of net absorption

> New construction sent vacancy up a tick

> Asking rates continued to rise

After a very strong 2015, the first quarter of 2016 seems to be a continuation of the trend of high net absorption. Net absorption was 900,732 square feet in the first quarter of 2016, a bit higher than in the first quarter of 2015, and much higher than in the fourth quarter of 2015. The renaissance in industrial construction – or more properly warehouse/distribution construction – was in full swing, with the market’s inventory increasing by almost 1 million square feet. Of course, every silver lining has a cloud, and the cloud this quarter was the completion of a large speculative building without pre-leasing. The addition of more than 400,000 square feet of new, empty space sent vacancy up a tenth of a point to 5.6 percent. This minor increase in vacancy did not dampen the weighted average asking rate, which increased to $0.65 per square foot (psf) on a triple net (NNN) basis.



Historical Net Absorption vs.Completions

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

1 Q 2014

2 Q 2014

3 Q 2014

4 Q 2014

1 Q 2015

2 Q 2015

3 Q 2015

4 Q 2015

1 Q 2016

Net Absorption Completions

Occupancy vs.Industrial Employment

86.0%

88.0%

90.0%

92.0%

94.0%

96.0%

98.0%

100.0%

125,000

130,000

135,000

140,000

145,000

150,000

155,000

160,000

1 Q 2014

2 Q 2014

3 Q 2014

4 Q 2014

1 Q 2015

2 Q 2015

3 Q 2015

4 Q 2015

1 Q 2016

Industrial Jobs Occupancy Rate

JAN2016

JAN2015 CHANGE

Construction 53,300 47,300 + 6,000

Manufacturing 21,900 20,800 + 1,100Transportation & Warehousing 40,000 36,300 + 3,700

Wholesale 21,800 21,400 + 400

Source: Nevada Department of Employment, Training and Rehabilitation

2 Las Vegas Research & Forecast Report | Q1 2016 | Industrial | Colliers International

Southern Nevada’s industrial job market improved in January 2016 (the latest month of data available) compared with January 2015, adding 11,200 jobs in the past twelve months, 6,000 of them in the construction sector. The transportation & warehousing sector added 3,700 jobs over the past twelve months, the manufacturing sector added 1,100 jobs, and the wholesale sector added 400. Southern Nevada’s strength as a service economy and a high-growth community appear again to be driving industrial employment growth. Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January 2015. From December 2015 to December 2016, total employment in Southern Nevada has increased by 18,200 jobs.

Southern Nevada’s industrial inventory expanded by 1,104,060 square feet in the first quarter of 2016. This is the largest quarterly expansion of industrial inventory since the third quarter of 2008, soon after the beginning of the Great Recession. Industrial development has been on the rise over the past three years, but only now is speculative development overtaking build-to-suit development, and this presents dangers. The first spate of speculative development hit the market fully pre-leased, and whetted the appetite of developers for more speculative space. The completion of the first new building at the Lone Mountain Corporate Center this quarter was the first new speculative project completed without pre-leasing since the beginning of the Great Recession. It may not be the last, as pre-leasing of industrial buildings currently under construction stood at 42 percent. Forward supply stood at 6.5 million square feet in the first quarter of 2016. Warehouse/distribution product still dominates the development landscape, but low vacancy and rising asking rates in the light industrial sector presage an increase in development of that product type in the future.

Southern Nevada’s industrial market has now posted positive net absorption every quarter since the fourth quarter of 2012. This streak was extended in the first quarter of 2016, which posted 900,732 square feet of net absorption. This was an improvement over the fourth quarter of 2015, and was slightly higher than one year ago in the first quarter of 2015. Whether the remainder of 2016 will follow suit with 2015 is unknown – the potential for that kind of performance exists, but current worries about the health of the national economy call it into question. Gross absorption fell this quarter over last, and has been on the decline since the second quarter of 2015, when it surged to 4.3 million square feet. First quarter gross absorption was 2.7 million square feet, the lowest first quarter gross absorption since 2011.

Net absorption was positive in the first quarter of 2016 in five of the Valley’s seven submarkets. The highest net absorption was experienced in the two submarkets with the largest share of warehouse/distribution product, North Las Vegas (565,203 square feet) and Southwest (303,093 square feet). Net absorption was negative in Henderson (negative 105,917 square feet) and the Northwest submarket (negative 10,972 square feet).

Industrial Development Pipeline

Project Type Submarket Size Pre-Leasing Completion

Under Construction 1,462,000 SF

Jones Corporate Park Warehouse/Distribution Southwest 416,000 SF 20% Q2-2016

Sunpoint Business Center Warehouse/Distribution North Las Vegas 312,000 SF 0% Q4-2016

Black Mountain Distribution Center Warehouse/Distribution Henderson 233,000 SF 100% Q2-2016

Blue Diamond Business Center 3 Warehouse/Distribution Southwest 172,000 SF 84% Q2-2016

Parc Post Warehouse/Distribution Southwest 165,000 SF 0% Q3-2016

Cheyenne Distribution Center Warehouse/Distribution North Las Vegas 164,000 SF 100% Q4-2016

Planned Construction 4,995,000 SF

South 15 Airport Center Warehouse/Distribution Airport 1,323,000 SF 0% 2017

Northgate Development 1-2 Warehouse/Distribution North Las Vegas 806,000 SF 0% 2017

Switch SuperNAP 10 Warehouse/Distribution Southwest 500,000 SF BTS 2017

Henderson Freeway Crossings Warehouse/Distribution Henderson 453,000 SF 0% Q3-2016

Blue Diamond Business Center 6 Warehouse/Distribution Southwest 430,000 SF 0% 2017

ProLogis North 15 Freeway 1/2 Warehouse/Distribution North Las Vegas 411,000 SF 0% 2017

UFC BTS Industrial Southwest 250,000 SF BTS 2017

Lone Mountain Corporate Park 2 Warehouse/Distribution North Las Vegas 244,000 SF 0% 2017

Henderson Commerce Center IV Warehouse/Distribution Henderson 240,000 SF 0% 2017

ProLogis Beltway Distribution Center Warehouse/Distribution Southwest 211,000 SF 0% 2017

Torrey Park Warehouse/Distribution Southwest 73,000 SF 0% 2017

2800 Sunset Road Light Industrial Airport 54,000 SF 0% Q4-2016


for inflation , the weighted average asking lease rate would be $0.49 psf NNN, a $0.06 increase from one year ago. The current asking rate, adjusted for inflation, is $0.02 lower than it was during the last economic recovery in 2004. Units leased in the first quarter of 2016 had effective lease rates that averaged 106.3 percent of asking rates. This indicates that more increases in asking rental rates will occur in 2016, probably in spite of potential increases in vacancy, especially if those increases in vacancy are due to new construction rather than vacations of existing industrial space. As rental rates climb, new industrial developments will become more viable, especially of non-warehouse/distribution product.

In 2015, final industrial investment sales volume was $295.8 million in 43 sales that totaled 3.1 million square feet. The average sales price in 2015 was $96.58 psf, and the average cap rate was 7.1 percent, a slight compression from 2014’s average cap rate of 7.3 percent. Year-to-date in 2016, we’ve seen industrial investment sales volume of $46.1 million in 24 sales totaling 465,000 square feet. This gives us an average sales price per square foot of $99.02. Southern Nevada’s industrial market had just over 1.1 million square feet of product available for sale as investments, with an average asking price of $121.65 psf, and an average cap rate of 6.1 percent, a notable compression of the asking cap rate of 6.4 percent recorded in 2015.

Industrial vacancy declined in every quarter between the first quarter of 2012 and the fourth quarter of 2015, dropping 14.0 percent to 5.5 percent. The first quarter of 2016 saw the first increase in industrial vacancy in four years. Vacancy increased by 0.1 point to 5.6 percent, despite positive net absorption. Lower overall activity (i.e. gross absorption) and the completion of the 450,731 square foot first phase of the Lone Mountain Corporate Center. The next twelve months will add, potentially, another 1.3 million square feet of vacant industrial space to inventory. Given that this is occurring alongside a trend of lower overall industrial lease activity, there is the potential for further increases in vacancy over the next three quarters.

The industries most active in occupying industrial space over the past twelve months were involved in wholesale (most likely serving the Resort Corridor), manufacturing, services and retail. Local companies took about 42 percent of the leased square footage we tracked over this period. Companies headquartered in the Southwest U.S. took 17 percent, while 13 percent was taken by companies from the Great Plains, including Texas, and 11 percent by companies from the Mid-Atlantic region.

The weighted average asking lease rate for industrial space increased to $0.65 psf NNN in the first quarter of 2016. This was $0.08 higher than one year ago, and $0.01 higher than one quarter ago. If adjusted

1 Using the Consumer Price Index, All Urban Consumers, West Region, Class A Cities, 1982-1984 = 100

“Of course, every silver lining has a cloud, and the cloud this quarter

was the completion of a large speculative building without pre-leasing.”- John Stater, Research & GIS Manager


Warehouse/distribution space knocked it out of the park in 2015, chocking up 2.4 million square feet of net absorption while adding 1.8 million square feet to total inventory. 2016 might give the warehouse/distribution market a run for its money, as the market is asked to absorb 3 million square feet of new speculative industrial space. So far, the market has absorbed (or will absorb, given pre-leasing) 1.3 million square feet. If the market sees vacations of industrial space in the neighborhood of 2.3 million square feet per quarter, which would be average for the past four years, Southern Nevada will need to see gross absorption increase significantly over the next three quarters to keep up. This is possible but unlikely, so expect to see warehouse/distribution vacancy increase over the course of 2016, and warehouse/distribution development to cool by 2017.

Vacancy in the light distribution sector has been dropping like a stone four quarters, from 11 percent in the first quarter of 2015 to the current 6.2 percent vacancy. Alongside this drop in vacancy, the light distribution sector has experienced over 1 million square feet of net absorption and a $0.08 increase in asking rental rates. Despite this excellent performance, there is no light distribution space currently under construction or planned to begin construction in 2016. When warehouse/distribution development cools in 2017, developers may turn their eyes to light distribution.

If the lack of potential development of light distribution space strikes you as odd, the lack of light industrial development is even more surprising. Light industrial vacancy stood at only 5 percent in the first quarter of 2016, just half a point higher than warehouse/distribution. Net absorption of light industrial space has averaged 200,000 square feet per quarter over the past two years, which means the market currently has about 2 months of supply. More importantly, gross absorption of light industrial space has remained

steady and strong over the past two years, and asking rental rates have increased by $0.13 per square foot over the past twelve months. Fantastic performance, yet only 54,000 square feet of forward supply. Expect this to change by 2017.

With available light industrial space on the market drying up and little new supply on the horizon, the immediate beneficiary may be incubator and flex space. The incubator market has seen a drop in vacancy rates similar to that of the light distribution market over the past year, with vacancy dropping from 11.7 percent to 7.7 percent. Flex vacancy over the same period has dropped from 16.8 percent to 12.9 percent. Gross absorption has remained healthy for incubator space, and we think this will remain the case over the next year due to spillover from the tight light industrial market.

It would be a mistake to fret much over the potential for increasing industrial vacancy in 2016 for two reasons. First and foremost, the year is not over yet and demand may very well rise to the occasion. The summer months will tell – if net absorption increases in the second and third quarters of 2016 as it did in 2015, we will be in for another very strong year. The other reason to keep anxiety at bay is the source of this potential rise in vacancy. If vacancy rises in 2016, it will be because of new development rather than business closures or downsizing. The trajectory for 2016, at this moment, seems good. Visitor volume on the Las Vegas “Strip” continues to rise, which favors the wholesale sector. Construction, primarily of infrastructure but also of “Strip” resorts, multifamily and industrial space, appears to be on the rise. We think demand will hold steady for the industrial market in 2016. Asking rates will probably continue to increase, especially in the light distribution and light industrial sectors, and proposed development will likely diversify.

Investment Sales

2012 2013 2014 2015 2016 YTD

No. Sales 77 58 82 43 24

Square Feet Sold 2,488,000 5,697,000 3,063,000 3,062,000 496,000

Sales Volume $153.4 MM $352.9 MM $272.7 MM $295.8 MM $46.1 MM

Average Price/SF $61.11 $61.94 $89.03 $96.58 $92.94

Average Cap Rate* 8.3% 7.9% 7.3% 7.1% -

Average Sale Size (SF) 32,000 98,000 37,000 71,000 21,000

*Cap rate on industrial properties available for sale as investments

NORTHWEST

EASTLAS VEGAS

NORTHLAS VEGAS

SOUTHWEST

WESTCENTRAL

AIRPORT

HENDERSON

15

215

215

95

95

Significant Industrial Sale Activity

Westland Corporate Center79,000 SF - $7,200,000

$92.00/SF

February 2016

Flex

FedEx Distribution Center130,000 SF - $11,950,000

$92.00/SF

January 2016

Warehouse/Distribution

Raco Distribution Facility103,000 SF - $7,150,000

$69.00/SF

February 2016


Spencer Airport Plaza II 29,000 SF - $3,250,000

$112.00/SF

February 2016

Light Industrial

PaulSon Dice Facility65,000 SF - $3,950,000

$61.00/SF

January 2016



Lease Activity

Property Name Lease Date Lease Term Size Lease Rate Type

Black Mountain Distribution Center Feb 2016 185 months 233,000 SF $0.55 NNN Warehouse/Distribution

Highland Industrial Center Jan 2016 63 months 19,000 SF $0.49 NNN Light Industrial

Patrick Commerce Center Jan 2016 60 months 16,000 SF $0.61 NNN Light Distribution

Patrick Airport Center Feb 2016 36 months 6,000 SF $0.57 NNN Incubator

Northpoint Business Center Feb 2016 37 months 4,000 SF $0.57 NNN Flex

Market Comparisons - Las Vegas

Industrial Market

TYPETOTAL

INVENTORYSF

DIRECTVACANT SF

DIRECTVACANCY

RATE

SUBLEASE VACANCY

SF

TOTALVACANT

SF

VACANCYRATE

CURRENT QUARTER

VACANCY RATEPRIOR

QUARTER

NET ABSORPTION

CURRENT QTR SF

NET ABSORPTION

YTDSF

COMPLETIONSCURRENTQTR SF

COMPLETIONS YTD SF

UNDER CONSTRUCTION

SF

PLANNED CONSTRUCTION

SF

WEIGHTEDAVG ASKING

RENTALRATE

AIRPORT SUBMARKET

WH 5,856,499 646,957 11.0% - 646,957 11.0% 10.8% (15,865) (15,865) - - - 479,440 $0.62 LD 3,236,376 272,636 8.4% 17,074 289,710 9.0% 9.0% 17,085 17,085 - - - - $0.68 LI 2,968,086 276,091 9.3% - 276,091 9.3% 10.2% 18,565 18,565 - - - 54,000 $0.97 INC 1,523,046 180,237 11.8% 3,297 183,534 12.1% 15.8% 56,543 56,543 - - - - $0.86 FLX 1,508,931 277,385 18.4% 3,228 280,613 18.6% 16.5% (30,605) (30,605) - - - - $1.12 Total 15,092,938 1,653,306 11.0% 23,599 1,676,905 11.1% 11.3% 45,723 45,723 - - - 533,440 $0.80

EAST LAS VEGAS SUBMARKET

WH 1,115,546 - 0.0% - - 0.0% 4.9% 54,912 54,912 - - - - $- LD 532,163 11,592 2.2% - 11,592 2.2% 1.2% (5,092) (5,092) - - - - $0.35 LI 1,798,241 43,882 2.4% - 43,882 2.4% 3.1% 11,008 11,008 - - - - $0.56 INC 281,755 30,225 10.7% - 30,225 10.7% 12.5% 4,940 4,940 - - - - $0.54 FLX 233,692 4,901 2.1% 31,339 36,240 15.5% 6.5% 10,276 10,276 - - - - $0.60 Total 3,961,397 90,600 2.3% 31,339 121,939 3.1% 4.2% 76,044 76,044 - - - - $0.53

HENDERSON SUBMARKET

WH 6,690,288 204,315 3.1% 90,170 294,485 4.4% 1.4% (151,815) (151,815) - - - 1,533,630 $0.57 LD 1,634,138 100,924 6.2% 18,162 119,086 7.3% 5.2% (16,305) (16,305) - - - - $0.59 LI 3,644,828 163,889 4.5% - 163,889 4.5% 5.5% 35,651 35,651 - - - - $0.64 INC 497,448 17,603 3.5% 2,654 20,257 4.1% 6.6% 15,328 15,328 - - - - $0.56 FLX 1,340,446 136,974 10.2% - 136,974 10.2% 12.6% 11,224 11,224 - - - - $0.95 Total 13,807,148 623,705 4.5% 110,986 734,691 5.3% 4.2% (105,917) (105,917) - - - 1,533,630 $0.67

NORTH LAS VEGAS SUBMARKET

WH 21,508,785 731,900 3.4% 0 731,900 3.4% 1.4% 397,694 397,694 832,535 832,535 693,305 1,624,230 $0.40 LD 5,053,540 416,739 8.2% 50,315 467,054 9.2% 9.2% 34,468 34,468 - - - - $0.46 LI 9,023,444 358,719 4.0% 40,304 399,023 4.4% 5.3% 114,555 114,555 - - - - $0.57 INC 717,495 62,173 8.7% 0 62,173 8.7% 9.7% 7,521 7,521 - - - - $0.66 FLX 796,116 109,249 13.7% 0 109,249 13.7% 15.1% 10,965 10,965 - - - - $0.62 Total 37,099,380 1,678,780 4.5% 90,619 1,769,399 4.8% 3.9% 565,203 565,203 832,535 832,535 693,305 1,624,230 $0.48

NORTHWEST SUBMARKET

WH 224,906 - 0.0% - - 0.0% 0.0% - - - - - - $- LD 50,000 12,159 24.3% - 12,159 24.3% 7.6% (8,359) (8,359) - - - - $0.95 LI 341,430 31,956 9.4% - 31,956 9.4% 10.1% 2,469 2,469 - - - - $0.64 INC 99,427 7,117 7.2% - 7,117 7.2% 2.0% (5,104) (5,104) - - - - $0.97 FLX 740,230 129,096 17.4% - 129,096 17.4% 17.4% 22 22 - - - - $0.94 Total 1,455,993 180,328 12.4% - 180,328 12.4% 11.6% (10,972) (10,972) - - - - $0.89

SOUTHWEST SUBMARKET

WH 14,798,458 770,102 5.2% 53,556 823,658 5.6% 4.5% 153,085 153,085 271,525 271,525 753,234 1,464,320 $0.57 LD 7,199,416 274,472 3.8% 47,776 322,248 4.5% 4.9% 75,430 75,430 - - - - $0.71 LI 10,467,802 581,069 5.6% 8,040 589,109 5.6% 6.1% 37,625 37,625 - - - - $0.66 INC 2,372,501 113,932 4.8% - 113,932 4.8% 5.9% 27,086 27,086 - - - - $0.68 FLX 1,684,854 159,219 9.5% 2,835 162,054 9.6% 10.0% 9,867 9,867 - - - - $0.86 Total 36,523,031 1,898,794 5.2% 112,207 2,011,001 5.5% 5.4% 303,093 303,093 271,525 271,525 753,234 1,464,320 $0.65

WEST CENTRAL SUBMARKET

WH 2,255,565 17,283 0.8% - 17,283 0.8% 0.8% - - - - - - $0.33 LD 949,515 60,857 6.4% - 60,857 6.4% 9.2% 26,600 26,600 - - - - $0.40 LI 7,901,767 363,760 4.6% - 363,760 4.6% 4.7% 9,314 9,314 - - - - $0.70 INC 2,511,374 204,810 8.2% 12,178 216,988 8.6% 7.6% (15,033) (15,033) - - - - $0.71 FLX 161,527 16,802 10.4% - 16,802 10.4% 14.5% 6,677 6,677 - - - - $0.87 Total 13,779,748 663,512 4.8% 12,178 675,690 4.9% 5.0% 27,558 27,558 - - - - $0.67

MARKET TOTAL

WH 52,450,047 2,370,557 4.5% 143,726 2,514,283 4.8% 3.4% 438,011 438,011 1,104,060 1,104,060 1,446,539 5,101,620 $0.53 LD 18,655,148 1,149,379 6.2% 133,327 1,282,706 6.9% 6.9% 123,827 123,827 - - - - $0.58 LI 36,145,598 1,819,366 5.0% 48,344 1,867,710 5.2% 5.8% 229,187 229,187 - - - 54,000 $0.69 INC 8,003,046 616,097 7.7% 18,129 634,226 7.9% 8.9% 91,281 91,281 - - - - $0.73 FLX 6,465,796 833,626 12.9% 37,402 871,028 13.5% 13.5% 18,426 18,426 - - - - $0.94 Total 121,719,635 6,789,025 5.6% 380,928 7,169,953 5.9% 5.6% 900,732 900,732 1,104,060 1,104,060 1,446,539 5,155,620 $0.65

QUARTERLY COMPARISON AND TOTALS

Q1-16 121,719,635 6,789,025 5.6% 380,928 7,169,953 5.9% 5.6% 900,732 900,732 1,104,060 1,104,060 1,446,539 5,155,620 $0.65

Q4-15 120,615,575 6,585,697 5.5% 110,304 6,696,001 5.6% 6.2% 575,402 5,108,690 173,608 1,914,601 2,224,326 4,361,662 $0.64

Q3-15 120,441,967 6,987,491 5.8% 467,329 7,454,820 6.2% 6.9% 1,771,327 4,533,288 952,290 1,740,993 1,689,817 6,390,005 $0.61 Q2-15 119,489,677 7,806,528 6.5% 406,957 8,213,485 6.9% 7.7% 1,863,470 2,761,961 788,703 788,703 1,731,785 5,453,451 $0.57 Q1-15 118,700,974 8,881,295 7.5% 294,896 9,176,191 7.7% 8.5% 898,491 898,491 - - 1,633,705 6,665,344 $0.57 Q4-14 118,700,974 9,779,786 8.2% 303,740 10,083,526 8.5% 9.0% 892,946 3,990,039 444,520 1,095,400 862,161 3,071,639 $0.56 Q3-14 118,256,454 10,228,212 8.6% 364,977 10,593,189 9.0% 9.7% 868,758 3,097,093 14,248 650,880 689,022 964,759 $0.56

WH = Warehouse LD = Light Distribution LI = Light Industrial INC = Incubator FLX = Flex



Vacancy Rate 16.7% 17.5% 18.6%

Asking Rent (PSF, FSG) $2.00 $1.97 $1.89


New Completions (SF) 0 123,617 212,888

Market IndicatorsRelative to prior period Market Q4 2015 Market Q1 2016*

VACANCY

NET ABSORPTION

COMPLETIONS

RENTAL RATE

*Projected


$1.80

$1.85

$1.90

$1.95

$2.00

$2.05

$2.10

15.0%

16.0%

17.0%

18.0%

19.0%

20.0%

21.0% 1 Q 2014

2 Q 2014

3 Q 2014

4 Q 2014

1 Q 2015

2 Q 2015

3 Q 2015

4 Q 2015

1 Q 2016



Class A $2.65 $2.66

Class B $1.96 $2.04

Class C $1.65 $1.64

+11.7%

O�ceEmployment

O�ceSF/Job

SubleaseVacancy

+2.8%

Q4

-22.6

“…the willingness by businesses to expand appears to be increasing.”

Economic Indicators

Office Picks Up Steam


LAS VEGAS | OFFICEQ1 2016

> The office market had strong net absorption in the first quarter of 2016

> No new construction in the first quarter, but it is on the way in 2016

> Asking rates continued to rise in response to increased demand

Over the past three years, and despite a few bad quarters, Southern Nevada’s office market has managed a pretty strong recovery. Vacancy is still quite high, but it is nearing levels we might deem the “new normal”, and could very well exceed expectations and return to the long term 10 percent average vacancy we used to know and love. The first quarter of 2016 extended its run of positive net absorption to five quarters, with 375,054 square feet of net absorption. This brought vacancy down an impressive 0.8 points to 16.7 percent. There were no new completions this quarter, and asking rents increased to $2.00 per square foot (psf) on a Full Service Gross (FSG) basis.




-300,000

-200,000

-100,000

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1 Q 2014

2 Q 2014

3 Q 2014

4 Q 2014

1 Q 2015

2 Q 2015

3 Q 2015

4 Q 2015

1 Q 2016


Occupancy vs.Office Employment

78.0%

79.0%

80.0%

81.0%

82.0%

83.0%

84.0%

100,000

105,000

110,000

115,000

120,000

125,000

130,000

1 Q 2014

2 Q 2014

3 Q 2014

4 Q 2014

1 Q 2015

2 Q 2015

3 Q 2015

4 Q 2015

1 Q 2016

Office Jobs Occupancy Rate

JAN 2016 JAN 2015 CHANGE

Information 10,100 10,200 - 100

Financial Activities 43,600 42,600 + 1,000Professional & Business Services 125,700 119,200 + 6,500

Health Care 54,800 60,900 + 6,100

Source: Nevada Department of Employment, Training and Rehabilitation

2 Las Vegas Research & Forecast Report | Q1 2016 | Office | Colliers International

Southern Nevada’s office job market improved in January 2016 (the latest month of data available) compared with January 2015, adding approximately 13,500 jobs in the past twelve months, with the largest contribution coming from the professional/business services sector (+6,500 jobs), and with the information sector dropping 100 jobs. The health care sector added 6,100 new jobs over the past year, and the financial services sector added 1,000 jobs. Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January 2015. From January 2015 to January 2016, total employment in Southern Nevada has increased by 32,600 jobs.

The office market had a welcome respite from new construction in the first quarter of 2016, after inventory expanded by almost 400,000 square feet in 2015. The market had 325,000 square feet of office space under construction, almost half of it being build-to-suit space for government tenants in the Downtown submarket. We think 298,000 square feet of that office space will be completed in the second quarter of 2016. Another 421,000 square feet of office space is planned to begin construction within the next twelve months, with completion for most of it scheduled for 2017.

Southern Nevada’s office market had 375,054 square feet of net absorption in the first quarter of 2016, following four straight quarters of positive net absorption in 2015. Net absorption in the first quarter of 2016 was a bit more than half of that recorded in the first quarter of 2015, but was more than triple the net absorption in the fourth quarter of 2015.

In the first quarter of 2016, net absorption was highest in the East Las Vegas submarket (126,603 square feet), followed by Airport (99,969 square feet) and West Central (88,352 square feet). It seems that net absorption favors the established office submarkets one quarter, and the newer submarkets in another. Negative net absorption occured in the Downtown and North Las Vegas submarkets.

Demand for office space over the past twelve months came primarily from manufacturing (290,547 square feet), professional and business services (272,562 square feet) and financial activities, especially mortgage and title companies (150,344 square feet). Mortgage and title companies have been stimulated by the recent expansion of the Valley’s construction industry. On the manufacturing side, keep in mind that manufacturing includes printing and publishing and publishing includes digital media like websites. The trend of taking less space per office employee remains a headwind to office market growth, but the willingness by businesses to expand appears to be increasing.

Positive net absorption drove the office vacancy rate down to 16.7 percent in the first quarter of 2016. An increase in net absorption and a lack of inventory expansion get the credit. Current vacancy is 1.9 percentage points lower than one year ago. At recent rates of net absorption, the office market could stabilize at 10.0 percent vacancy in approximately 3 years, assuming little or no inventory expansion.

Office vacancy increased in two of the Valley’s eight submarkets in the first quarter of 2016, with the North Las Vegas submarket experiencing the largest increase (1.8 percentage points), followed by Downtown (0.7 points). The East Las Vegas submarket experienced the sharpest decrease in vacancy, 2.3 points, to 21.3 percent. Large

3

Office Development Pipeline

Project Type Submarket Size (SF) Status Completion

Build-To-Suit 129,000

Federal Justice Tower Class A Downtown 129,000 Under Construction Q2-2016

Supreme Court Building Class B Downtown 27,000 Under Construction Q3-2016

Build-To-Suit Total 156,000

Tivoli Village Class A Northwest 134,000 Under Construction Q2-2016

The Grid Class A Downtown 125,000 Planned 2017

Centennial Hills Center Class B Northwest 124,000 Planned 2017

The Square Class C Southwest 80,000 Planned 2017

Seven Hills Plaza D Class B Henderson 42,000 Planned Q4-2016

The Park at Spanish Ridge Class B Southwest 35,000 Under Construction Q2-2016

Cadence Class C Henderson 30,000 Planned 2017

Stone Creek Professional Plaza Class C Southwest 20,000 Planned 2017

Speculative Total 590,000

Office Total 746,000


office asking rate, at $2.19 psf FSG. This is followed by the Northwest’s $2.09 psf FSG and Downtown’s $2.08 psf FSG. The Valley’s lowest average asking rate is in the West Central submarket, at $1.67 psf FSG.

Office space available for sublease took a significant jump in the first quarter of 2014 due to Citibank’s call center operations center in the Northwest being put on the market. This brought available sublease space to 427,367 square feet. At the beginning of 2016, available sub-lease space has finally decreased to 383,992 square feet from a high of 520,969 square feet experienced just last quarter. This sharp decline is due entirely to the sublease of 138,000 square feet at 8725 W Sahara Avenue to Sutherland Global Services.

The office investment sales got off to a slow start in 2016, with sales volume of $13.9 million in five sales totaling 86,000 square feet with an average price per square foot of $161.71 and an average cap rate of 9.2 percent. Investment sales lagged slightly in 2015 compared to 2014, with the year-end figures amounting to over 2 million square feet in 68 sales, with a sales volume of $384 million and an average sales price per square foot of $187.88. There was 1.7 million square feet of office space available for sale as investments in the first quarter of 2016, with an average asking price of $157.35 psf and an average asking cap rate of 7.3 percent.

vacancy decreases were also experienced in the West Central and Airport submarkets, and smaller decreases occurred in the Southwest, Northwest, and Henderson submarkets. The Valley’s lowest vacancy rate remains in Downtown, at 13.2 percent (but rising), while North Las Vegas had the Valley’s highest vacancy rate at 22.8 percent. Over the next few years, the East Las Vegas submarket should see the completion of a major expansion and renewal of the Las Vegas Convention Center, the completion of the nearby World Resorts property on the “Strip” and the potential construction of a new stadium near UNLV. This “Midtown renaissance” should stimulate demand for office space in the East Las Vegas submarket.

Vacancy in Class A office stood at 22.0 percent in the first quarter of 2016, a decrease of 1.1 points from the fourth quarter of 2015, and a year-over-year decrease of 0.7 points. Year-over-year, class B product saw vacancy decrease by 1.6 percentage points to 16.1 percent, while vacancy in Class C office decreased by 2.6 percentage points to 15.4 percent.

The weighted average asking rental rate for office space in Southern Nevada increased to $2.00 per square foot (psf) on a full service gross (FSG) basis in the first quarter of 2016, a $0.11 psf increase from one year ago and a sign that the availability of desirable space in the market is tightening. The Southwest continued to boast the Valley’s highest

Investment Sales Activity

2012 2013 2014 2015 2016 YTD

No. Sales 87 90 71 68 5

Square Footage 3,929,000 3,512,000 2,505,000 2,044,000 86,000


Average Price/SF $89.11 $162.83 $118.32 $187.88 $161.71

Average Cap Rate* 8.2% 7.6% 7.7% 7.5% 9.2%


*Cap rate on office properties available for sale as investments

Continued on Page 5

NORTHWEST

EASTLAS VEGAS

NORTHLAS VEGAS

SOUTHWEST

WESTCENTRAL

AIRPORT

HENDERSON

DOWNTOWNSUMMERLIN

15

215

215

95

95

Significant Office Sale Activity

7951 Deer Springs Way39,000 SF - $3,800,000

$100.00/SF

February 2016

Class B

Oakey Office Building101,000 SF - $30,100,000

$299.00/SF

March 2016

Class B

The Park at Spanish Ridge7,000 SF - $1,150,000

$169.00/SF

February 2016

Class C

Flamingo Trails

5,000 SF - $930,000

$176.00/SF

February 2016

Class C

Warm Springs Park

21,000 SF - $2,200,000

$107.00/SF

February 2016

Class C


Lease Activity

Property Name Lease Date Lease Term Size Lease Rate Type

Marnell Corporate Center Feb 2016 60 months 44,000 SF $2.44 FSG Class A

Durango Commons Feb 2016 67 months 35,000 SF $1.12 NNN Class B

Augusta Park Jan 2016 84 months 15,000 SF $1.30 NNN Class C

The Park Business Center Jan 2016 84 months 14,000 SF $1.34 NNN Class C

Summerlin One Feb 2016 65 months 13,000 SF $3.12 FSG Class A


Office Market

CLASS TOTAL INVENTORY SF

DIRECT VACANT SF

DIRECT VACANCY

RATE

SUBLEASE VACANT SF

TOTAL VACANT SF

VACANCY RATE CURRENT QUARTER

VACANCY RATE PRIOR QUARTER

NET ABSORPTION

CURRENT QTR SF

NET ABSORPTION

YTD SF

COMPLETIONS CURRENT QTR SF

COMPLETIONS YTD SF

UNDER CONSTRUCTION

SF


SF

WEIGHTED AVG ASKING

RENTAL RATE

AIRPORT SUBMARKET

A 729,174 234,524 32.2% 1,750 236,274 32.4% 32.5% 2,598 2,598 - - - - $2.80 B 2,400,206 197,309 8.2% 28,850 226,159 9.4% 12.8% 77,553 77,553 - - - - $1.94 C 3,186,214 477,835 15.0% 17,184 495,019 15.5% 16.2% 19,818 19,818 - - - - $1.66 Total 6,315,594 909,668 14.4% 47,784 957,452 15.2% 16.8% 99,969 99,969 - - - - $2.01

DOWNTOWN SUBMARKET

A 1,103,341 210,140 19.0% 13,706 223,846 20.3% 20.8% 5,692 5,692 - - 129,000 125,000 $2.56 B 2,429,559 289,068 11.9% - 289,068 11.9% 10.0% (45,013) (45,013) - - 26,600 - $2.04 C 1,497,571 166,390 11.1% 3,400 169,790 11.3% 11.5% 2,696 2,696 - - - - $1.54 Total 5,030,471 665,598 13.2% 17,106 682,704 13.6% 12.8% (36,625) (36,625) - - 155,600 125,000 $2.08


A 1,353,083 258,004 19.1% - 258,004 19.1% 24.3% 70,335 70,335 - - - - $3.11 B 1,542,404 447,762 29.0% - 447,762 29.0% 31.1% 32,306 32,306 - - - - $1.68 C 2,629,026 471,720 17.9% 1,600 473,320 18.0% 18.9% 23,962 23,962 - - - - $1.36 Total 5,524,513 1,177,486 21.3% 1,600 1,179,086 21.3% 23.6% 126,603 126,603 - - - - $1.87

HENDERSON SUBMARKET

A 583,905 167,410 28.7% - 167,410 28.7% 28.4% -1,529 (1,529) - - - - $2.64 B 2,550,831 417,378 16.4% 5,000 422,378 16.6% 16.7% 4,047 4,047 - - - 42,000 $2.13 C 2,213,044 361,520 16.3% 6,566 368,086 16.6% 17.6% 20,448 20,448 - - - 30,000 $1.73 Total 5,347,780 946,308 17.7% 11,566 957,874 17.9% 18.3% 22,966 22,966 - - - 72,000 $2.07


A - - n/a - - n/a n/a - - - - - - $- B 245,696 92,398 37.6% - 92,398 37.6% 50.3% 5,252 5,252 - - - - $1.92 C 538,960 86,720 16.1% - 86,720 16.1% 12.5% (19,097) (19,097) - - - - $1.62 Total 784,656 179,118 22.8% - 179,118 22.8% 24.4% (13,845) (13,845) - - - - $1.77

NORTHWEST SUBMARKET

A 1,825,415 417,952 22.9% 7,409 425,361 23.3% 26.0% 35,953 35,953 - - 134,003 - $2.36 B 3,537,755 543,549 15.4% 33,200 576,749 16.3% 14.8% (19,105) (19,105) - - - 87,000 $2.11 C 3,341,658 417,795 12.5% 8,636 426,431 12.8% 13.5% 26,073 26,073 - - - 37,100 $1.78 Total 8,704,828 1,379,296 15.8% 49,245 1,428,541 16.4% 16.7% 42,921 42,921 - - 134,003 124,100 $2.09

SOUTHWEST SUBMARKET

A 828,642 134,851 16.3% 10,098 144,949 17.5% 11.0% (44,108) (44,108) - - - - $2.74 B 2,964,345 524,953 17.7% 47,820 572,773 19.3% 22.0% 73,672 73,672 - - 35,663 42,000 $2.38 C 3,512,711 546,095 15.5% 2,383 548,478 15.6% 16.1% 15,149 15,149 - - - 100,040 $1.87 Total 7,305,698 1,205,899 16.5% 60,301 1,266,200 17.3% 17.9% 44,713 44,713 - - 35,663 142,040 $2.19


A 157,624 25,161 16.0% - 25,161 16.0% 19.3% - - - - - - $2.46 B 1,924,410 322,587 16.8% - 322,587 16.8% 23.1% 119,349 119,349 - - - - $1.85 C 3,020,842 546,274 18.1% 4,524 550,798 18.2% 17.1% (30,997) (30,997) - - - - $1.52 Total 5,102,876 894,022 17.5% 4,524 898,546 17.6% 19.4% 88,352 88,352 - - - - $1.67 MARKET TOTALA 6,581,184 1,448,042 22.0% 32,963 1,481,005 22.5% 23.7% 68,941 68,941 - - 263,003 125,000 $2.66 B 17,595,206 2,835,004 16.1% 114,870 2,949,874 16.8% 18.2% 248,061 248,061 - - 62,263 171,000 $2.04 C 19,940,026 3,074,349 15.4% 44,293 3,118,642 15.6% 15.9% 58,052 58,052 - - - 167,140 $1.64 Total 44,116,416 7,357,395 16.7% 192,126 7,549,521 17.1% 18.0% 375,054 375,054 - - 325,266 463,140 $2.00


Q1-16 44,116,416 7,357,395 16.7% 192,126 7,549,521 17.1% 18.0% 375,054 375,054 - - 325,266 463,140 $2.00

Q4-15 44,116,416 7,732,449 17.5% 197,676 7,930,125 18.0% 17.9% 98,619 1,277,862 123,617 399,207 197,000 485,140 $1.97

Q3-15 43,992,799 7,707,451 17.5% 150,546 7,857,997 17.9% 18.8% 402,285 1,179,243 46,650 275,590 242,000 435,140 $1.95 Q2-15 43,946,149 8,063,086 18.3% 182,799 8,245,885 18.8% 19.0% 111,773 776,958 16,052 228,940 300,444 435,140 $1.91 Q1-15 43,930,097 8,158,807 18.6% 172,615 8,331,422 19.0% 20.0% 665,185 665,185 212,888 212,888 300,444 310,140 $1.89 Q4-14 43,717,209 8,611,104 19.7% 146,951 8,758,055 20.0% 19.1% (171,446) 564,726 268,420 376,620 460,438 418,140 $1.90 Q3-14 43,448,789 8,171,238 18.8% 111,340 8,282,578 19.1% 19.1% 54,717 736,172 12,000 108,200 757,444 150,040 $1.87


Southern Nevada’s office market recovery as a long time coming, but appears to have finally taken root. The past two years have seen over 2 million square feet of net absorption, bringing vacancy down from almost 20 percent to 16.7 percent. 2016 will not be without inventory expansion, as 325,000 square feet of new office space is now under construction. Much of this is pre-leased, so the impact should be minimal. This means that another strong year of net absorption, in the 1 million square foot range, could see vacancy rates fall to 15 percent, which we would count as normalized vacancy given the altered expectations of the post-Great Recession era.

Continued from Page 3



Asking Rent (PSF, NNN) $1.30 $1.31 $1.26


New Completions (SF) 80,000 29,800 0


VACANCY

NET ABSORPTION

COMPLETIONS

RENTAL RATE

*Projected


$1.23

$1.26

$1.29

$1.32

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015 3 Q 2015 4 Q 2015 1 Q 2016



Power Center $1.61 $1.18

Community Center $1.26 $1.21

Neighborhood Center $1.36 $1.46

Strip Center $1.18 $1.16

+5.1%

RETAILTaxable Sales

RETAILEmployment

+3.7

RETAILSF/Job

+1.3%

Q12016

More Expasion for Retail Market


LAS VEGAS | RETAILQ1 2016

> The retail market continued its second post-recession expansion

> This is being helped by decreasing asking rates and expansion by big box retailers

> Taxable retail sales remain strong, but retail employment growth continues to disappoint

“Southern Nevada’s retail market appears to be back in growth mode.”

Southern Nevada’s retail market appeared to be back in growth mode. The market managed 285,353 square feet of net absorption in the first quarter of 2016, more than one quarter ago and also more than one year ago. This brought the vacancy rate down to 9.1 percent. This is still higher than the long-term market average, but it’s moving in the right direction. Retail completions totaled 80,000 square feet in the first quarter, with potentially 382,000 square feet of additional completions scheduled for 2016. The asking rental rate for retail space decreased to $1.30 per square foot (psf) on a triple-net (NNN) basis.

Economic Indicators




-300,000

-200,000

-100,000

0

100,000

200,000

300,000

400,000

1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015 3 Q 2015 4 Q 2015 1 Q 2016


Occupancy vs.Retail Employment

87.0%

88.0%

89.0%

90.0%

91.0%

92.0%

93.0%

70,000

72,000

74,000

76,000

78,000

80,000

82,000

1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015 3 Q 2015 4 Q 2015 1 Q 2016

Retail Jobs Occupancy Rate

2 Las Vegas Research & Forecast Report | Q1 2016 | Retail | Colliers International

According to the Nevada Department of Employment, Training and Rehabilitation, Southern Nevada’s retail job market improved significantly in January 2016 (the latest month of data available) compared with January 2015, adding approximately 5,400 jobs in the past twelve months. Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January 2015. From December 2015 to December 2016, total employment in Southern Nevada increased by 18,200 jobs.

The Nevada Department of Taxation reports that Clark County’s taxable retail sales for the fourth quarter of 2015 (the most recent quarter of data available) totaled $7.2 billion, up from $6.8 billion in taxable retail sales recorded in the third quarter of 2015, and better than the $6.9 billion in taxable retail sales recorded in the fourth quarter of 2014. The highest year-over-year growth in taxable retail sales were in building material and garden equipment and supplies (7.6 percent growth), followed closely by food service and drinking places (7.5 percent). Home furnishings also posted strong 6.3 percent growth. Non-store retailers, by comparison, managed 20.6 percent growth year-over-year. Taxable sales decreased by 20.9 percent for miscellanous store retailers, 8.7 percent for electronics and appliance retailers and 3.1 percent for apparel retailers.

The only retail development completed in Southern Nevada in the first quarter of 2016 was the 80,000 square foot Durango Arby Plaza neighborhood center in the Southwest submarket. Forward supply stood at 1,033,000 square feet, which would represent a mild expansion of Southern Nevada’s retail inventory if it all were completed. Of this, 243,000 square feet is currently under construction, with 61,000 square feet slated for completion by the second quarter of 2016. The most notable new retail project in Southern Nevada, though not tracked in our numbers, is the freestanding IKEA retail building in the Southwest, which should initially be 351,000 square feet with the potential for future expansion, will open in May 2016.

Net absorption totaled 285,353 square feet in the first quarter of 2016. This was more than three times the net absorption recorded one quarter ago, and almost double the net absorption recorded one year ago. The occupation of five big box spaces, three in the Northwest submarket, one in Henderson and one in North Las Vegas, played a significant role in boosting net absorption this quarter.

Net absorption was positive in six of the Valley’s eight submarkets, with only the Northeast and Downtown submarkets posting negative net absorption. Net absorption was highest this quarter in the Northwest submarket (118,563 square feet), followed by the Southwest (81,363 square feet). The Southwest and Henderson submarkets are experiencing strong growth in multifamily development, which should boost demand for retail in both submarkets over the next twelve months.

Gross absorption of retail product totaled 1.1 million square feet in the first quarter of 2016, a bit higher than in the fourth quarter of 2015, but almost a half million square feet lower than one year ago in the

3

Retail Development Pipeline

Project Type Submarket Size (SF) Completion

Silverado Promenade (Las Vegas & Silverado Ranch) Neighborhood Center University East 130,000 Q4-2016

Decatur 215 (Decatur & I-215) Community Center Northwest 52,000 Q3-2016

Whitney Ranch Retail (Whitney Ranch & Sunset) Strip Retail Henderson 42,000 Q2-2016

Upscale Retail Plaza (Rainbow & Warm Springs) Strip Retail Southwest 19,000 Q2-2016

Under Construction Total 243,000St Rose Square (St Rose & Amigo) Neighborhood Center Henderson 466,000 2017

Union Village (Galleria & Gibson) Strip Retail Henderson 125,000 2017

Caroline’s Court (Durango & El Capitan) Community Center Northwest 119,000 2017

Decatur 215 (Decatur & I-215) Community Center Northwest 100,000 2017

DCs Plaza (Durango & Farm) Neighborhood Center Northwest 73,000 2016

Silverado Ranch Boulevard (Silverado Ranch & Bermuda) Strip Retail University East 66,000 2016

Buffalo Plaza (Buffalo & Warm Springs) Strip Retail Southwest 53,000 2017

Centennial Hills Center (Durango & Grand Montecito) Strip Retail Northwest 31,000 2017

Planned Construction Total 1,033,000

Single Tenant Retail 2012 2013 2014 2015 2016 YTD

No. Sales 25 49 63 58 17

Square Footage Sold 319,000 868,000 551,000 838,000 94,000


Average Price/SF $244.81 $168.23 $348.70 $327.81 $365.73


Cap Rate 7.2% 7.2% 7.0%

Shopping Center Retail 2012 2013 2014 2015 2016 YTD

No. Sales 30 48 61 61 11

Square Footage Sold 1,781,000 3,892,000 2,888,000 3,635,000 960,000

Sales Volume $194.0 MM $378.4 MM $561.1 MM $697.0 MM $178.1

Average Price/SF $108.90 $97.21 $194.28 $191.77 $185.43


Cap Rate 8.9% 7.7% 7.1%


The average asking rental rate for retail space in Southern Nevada stood at $1.30 per square foot (psf) on a Triple-Net basis (NNN). This was $0.01 lower than in the fourth quarter of 2015, but $0.04 higher than one year ago. Adjusting for inflation, asking rental rates are now $0.96 psf NNN in 2002 dollars, $0.44 psf lower than in 2002.

Over the past quarter, two submarkets, North Las Vegas and University East, saw asking rental rates increase by $0.02 psf and $0.06 psf respectively. Two submarkets, Downtown and Henderson, saw no growth in asking rates. All other submarkets saw asking rental rates decrease quarter-over-quarter, with the largest decrease being $0.09 psf in the Northeast submarket. Since the fourth quarter of 2015, power centers, community centers and strip centers saw their average asking rental rate decrease in the first quarter of 2016, by $0.06 psf in power centers, $0.05 psf in community centers and by $0.02 psf in strip retail. Neighborhood centers saw a $0.10 psf increase in asking rates over the same period.

first quarter of 2015. Higher net absorption coupled with lower gross absorption suggests a more stable market, with fewer existing retailers downsizing or closing up shop entirely.

Retail vacancy in Southern Nevada stood at 9.1 percent in the first quarter of 2016, a decrease of 0.8 points from the first quarter of 2015’s vacancy of 9.9 percent. Southern Nevada’s retail market is now in its second expansion since the end of the Great Recession, the first occurring between 2012 and 2013. At current rates of net absorption, it would take the retail market 4.8 years to get back to a normalized 5 percent vacancy rate.

Among submarkets, the Valley’s highest vacancy this quarter was 13.4 percent in University East, followed by 10.2 percent in Downtown and West Central. Vacancy has been on the rise in the Downtown submarket over the past few quarters. The Northwest submarket had the lowest vacancy rate in the Valley at 6.8 percent, followed by Northeast at 7.8 percent. All submarkets but Downtown and Northeast saw vacancy decrease in the first quarter.

“… Southern Nevada’s current retail expansion [is] widespread and, hopefully, sustainable”- John Stater, Research & GIS Manager | Las Vegas

HouseholdsAve. HH Income

(2015)Occupied Retail Space

(2015 Average)Occupied Retail Space

(2016 Projected)

Downtown 36,500 $37,500 1,940,000 1,949,000

Henderson 107,100 $78,000 9,237,000 9,779,000

North Las Vegas 71,600 $62,000 5,552,000 5,993,000

Northeast 78,600 $50,400 3,099,000 3,237,000

Northwest 149,400 $74,200 12,557,000 13,199,000

Southwest 91,100 $75,900 7,644,000 8,421,000

University East 104,200 $54,200 7,597,000 7,905,000

West Central 54,600 $49,000 6,208,000 6,298,000

Source of Demographic Data: Claritas


Shopping center investment sales volume in 2015 was $697.0 million in 61 sales totaling 3.6 million square feet. The average sales price was $191.77 psf, and the average cap rate was 7.7 percent. So far in 2016, investment sales volume was $178.1 million in 11 sales totaling 960,000 square feet with an average sales price per square foot of $185.43 and an average cap rate of 7.1 percent.

Single-tenant retail investment sales volume in 2015 was $274.8 million in 58 sales totaling 838,000 square feet. The average sales price was $327.81 psf, and the average cap rate was 7.2 percent. So far in 2016, single-tenant retail investment volume was $34.4 million in 17 sales totaling 94,000 square feet with an average price per square foot of $365.73 and an average cap rate of 7.0 percent. Single-tenant retail owner/user sales volume so far in 2016 was $14.0 million in 10 sales totaling 71,000 square feet with an average sales price of $198.37 psf.

Retailers slated to enter Southern Nevada or expanding here include Paul Mitchell, Discount Tire, Lolo’s Chicken & Waffles, Chick-Fil-A, PDQ Chicken, Café Rio, Five Guys Burger & Fries, Black Bear Diner, Wingnutz, Pei Wei, and Cheeseburger Cheeseburger. Target is introducing a new Target Express concept to compete with Dollar General or Walgreens, though no locations have yet been announced in Southern Nevada. Walmart Neighborhood Market is planning locations at Durango & Hualapai and Boulder & Russell, and Smith’s Marketplace, a 128,450 square foot (plus fuel center) concept, looking into putting stores in the Cadence MPC and Skye Canyon.

With five big box leases in the first quarter of 2016, one might be tempted to credit the quarter’s strong performance solely to large retailers. Those five new big box tenants added up to 324,382 square feet, which was impressive, but it was partially offset by 227,411 square feet of newly vacated big box space in the Valley. This means that the lion’s share of net absorption (66 percent) was due to expansion by smaller retailers. This makes Southern Nevada’s current retail expansion widespread and, hopefully, sustainable.

NORTHWEST

NORTHEASTLAS VEGAS

NORTHLAS VEGAS

SOUTHWEST

WESTCENTRAL

RESORTCORRIDOR

UNIVERSITYAIRPORT

HENDERSON

DOWNTOWN

15

215

215

95

95

Significant Retail Sale Activity

Lake Mead Blvd. Retail 5,600 SF - $4,900,000

$871/SF

February 2016

Freestanding

Rainbow Plaza North290,000 SF - $48,000,000

$165/SF

January 2016

Power Center

SunMark Plaza284,000 SF - $59,800,000

$211.00/SF

January 2016

Power Center

Sunset Plaza34,000 SF - $9,500,000

$277/SF

January 2016

Community Center

Rainbow Plaza South131,000 SF - $20,400,000

$155/SF

January 2016

Neighborhood Center


Lease Activity

Property Name Tenant Lease Date Lease Term Size Lease Rate Type

Craig Rd Retail Burlington Coat Jan 2016 120 months 124,500 SF $1.02 NNN Community

Sahara Durango Center Smiths Feb 2016 60 months 54,000 SF $0.50 NNN Community

Longford Shoppes Dollar Tree Jan 2016 62 months 14,000 SF $0.81 NNN Neighborhood

Pecos Legacy Center Step Up Academy Feb 2016 40 months 3,900 SF $1.47 NNN Community

Eastern Ave Retail Muddy Mutts Jan 2016 66 months 3,600 $1.49 NNN Strip


Retail Market

TYPETOTAL

INVENTORYSF

DIRECTVACANT SF

DIRECTVACANCY

RATE

SUBLEASE VACANT SF

TOTALVACANT

SF

VACANCYRATE

CURRENT QUARTER

VACANCY RATEPRIOR

QUARTER

NET ABSORPTION

CURRENT QTR SF

NET ABSORPTION

YTDSF


COMPLETIONS YTD SF

UNDER CONSTRUCTION

SF


SF

WEIGHTEDAVG ASKING

RENTALRATE

DOWNTOWN

PC - - n/a - - n/a n/a - - - - - - $- CC 607,055 78,050 12.9% - 78,050 12.9% 9.4% (20,839) (20,839) - - - - $1.37 NC 518,070 54,207 10.5% - 54,207 10.5% 10.5% - - - - - - $1.00 SC 1,022,022 86,249 8.4% - 86,249 8.4% 7.0% (14,399) (14,399) - - - - $1.41 Total 2,147,147 218,506 10.2% - 218,506 10.2% 8.5% (35,238) (35,238) - - - - $1.26

HENDERSON

PC 2,896,215 201,401 7.0% - 201,401 7.0% 8.9% 56,523 56,523 - - - - $1.71 CC 2,646,472 150,564 5.7% - 150,564 5.7% 5.5% (6,142) (6,142) - - - - $1.31 NC 2,870,411 326,619 11.4% 221,052 547,671 19.1% 16.3% (19,985) (19,985) - - - - $1.68 SC 1,883,790 221,308 11.7% 3,701 225,009 11.9% 13.0% 22,347 22,347 - - 41,745 125,000 $1.08 Total 10,296,888 899,892 8.7% 221,052 1,120,944 10.9% 10.8% 52,743 52,743 - - 41,745 125,000 $1.36

NORTH LAS VEGAS

PC 774,065 31,571 4.1% - 31,571 4.1% 4.9% 6,590 6,590 - - - - $3.00 CC 2,311,384 188,657 8.2% - 188,657 8.2% 8.0% (2,665) (2,665) - - - - $1.36 NC 1,806,524 143,617 7.9% - 143,617 7.9% 6.9% (19,105) (19,105) - - - - $1.55 SC 1,286,206 235,237 18.3% - 235,237 18.3% 20.9% 33,145 33,145 - - - - $1.06 Total 6,178,179 599,082 9.7% - 599,082 9.7% 10.0% 17,965 17,965 - - - - $1.26

NORTHEAST

PC - - n/a - - n/a n/a - - - - - - $- CC 1,295,615 88,379 6.8% 18,614 106,993 8.3% 7.6% (8,677) (8,677) - - - - $1.08 NC 1,306,795 84,677 6.5% 62,301 146,978 11.2% 12.6% 17,473 17,473 - - - - $1.55 SC 768,914 91,036 11.8% - 91,036 11.8% 5.7% (47,218) (47,218) - - - - $0.84 Total 3,371,324 264,092 7.8% 80,915 345,007 10.2% 9.1% (38,422) (38,422) - - - - $1.10

NORTHWEST

PC 3,171,110 224,480 n/a - 224,480 7.1% 7.5% 13,186 13,186 - - - - $1.60 CC 4,336,890 132,550 3.1% 73,059 205,609 4.7% 6.2% 64,932 64,932 - - 52,000 118,982 $1.29 NC 3,636,860 324,453 8.9% 30,861 355,314 9.8% 13.0% 30,823 30,823 - - - 72,550 $1.25 SC 2,488,600 242,839 9.8% - 242,839 9.8% 10.2% 9,622 9,622 - - - 31,000 $1.24 Total 13,633,460 924,322 6.8% 103,920 1,028,242 7.5% 9.1% 118,563 118,563 - - 52,000 222,532 $1.37

SOUTHWEST

PC 944,314 - 0.0% 6,900 6,900 0.7% 0.7% - - - - - - $- CC 2,616,421 222,001 8.5% 1,047 223,048 8.5% 8.9% 7,053 7,053 - - - - $1.63 NC 2,303,100 174,978 7.6% - 174,978 7.6% 7.2% 66,189 66,189 80,000 80,000 - - $1.78 SC 2,457,701 270,119 11.0% - 270,119 11.0% 11.3% 8,121 8,121 - - - 52,700 $1.55 Total 8,321,536 667,098 8.0% 7,947 675,045 8.1% 8.2% 81,363 81,363 80,000 80,000 - 52,700 $1.59

UNIVERSITY EAST

PC 1,210,223 144,473 11.9% - 144,473 11.9% 12.0% 1,000 1,000 - - - - $1.23 CC 2,761,146 379,116 13.7% 16,480 395,596 14.3% 16.1% 48,644 48,644 - - - - $0.81 NC 1,953,965 135,477 6.9% 115,560 251,037 12.8% 10.9% 16,638 16,638 - - 129,588 - $1.24 SC 2,866,931 515,938 18.0% 8,000 523,938 18.3% 17.1% (33,145) (33,145) - - - 65,851 $1.08 Total 8,792,265 1,175,004 13.4% 132,040 1,307,044 14.9% 14.7% 33,137 33,137 - - 129,588 65,851 $1.11

WEST CENTRAL

PC 1,138,224 143,021 12.6% - 143,021 12.6% 12.8% 2,115 2,115 - - - - $1.25 CC 1,910,276 257,697 13.5% - 257,697 13.5% 14.7% 24,045 24,045 - - - - $1.23 NC 1,746,530 88,502 5.1% 96,267 184,769 10.6% 10.9% 5,510 5,510 - - - - $1.19 SC 2,212,326 224,625 10.2% - 224,625 10.2% 11.2% 23,572 23,572 - - - - $1.03 Total 7,007,356 713,845 10.2% 96,267 810,112 11.6% 12.3% 55,242 55,242 - - - - $1.04

MARKET TOTAL

PC 10,134,151 744,946 7.4% 6,900 751,846 7.4% 8.2% 79,414 79,414 - - - - $1.55 CC 18,485,259 1,497,014 8.1% 109,200 1,606,214 8.7% 9.3% 106,351 106,351 - - 52,000 118,982 $1.21 NC 16,142,255 1,332,530 8.3% 526,041 1,858,571 11.5% 11.5% 97,543 97,543 80,000 80,000 129,588 72,550 $1.46 SC 14,986,490 1,887,351 12.6% 11,701 1,899,052 12.7% 12.7% 2,045 2,045 - - 41,745 274,551 $1.16 Total 59,748,155 5,461,841 9.1% 653,842 6,115,683 10.2% 10.6% 285,353 285,353 80,000 80,000 223,333 466,083 $1.26


Q1-16 59,748,155 5,461,841 9.1% 653,842 6,115,683 10.2% 10.6% 285,353 285,353 80,000 80,000 223,333 466,083 $1.26 Q4-15 59,668,155 5,667,194 9.5% 629,228 6,296,422 10.6% 10.6% 89,390 577,784 29,800 152,429 270,402 710,023 $1.31 Q3-15 59,638,355 5,726,784 9.6% 579,499 6,306,283 10.6% 10.9% 140,309 488,394 55,000 122,629 209,588 452,095 $1.27 Q2-15 59,583,355 5,812,093 9.8% 675,838 6,487,931 10.9% 11.0% 166,145 348,085 67,629 67,629 184,588 224,550 $1.28 Q1-15 59,515,726 5,910,609 9.9% 623,327 6,533,936 11.0% 10.7% 181,940 181,940 0 0 122,629 468,883 $1.26 Q4-14 59,515,726 6,092,549 10.2% 295,068 6,387,617 10.7% 10.3% (207,920) 132,843 49,895 300,213 122,629 564,865 $1.26 Q3-14 59,465,831 5,834,734 9.8% 306,275 6,141,009 10.3% 10.3% 182,827 340,763 220,000 250,318 187,210 167,159 $1.27 PC = Power Center CC = Community Center NC = Neighborhood Center SC = Strip Center


Economic Indicators



Rent (Per Unit) $925 $910 $878

Net Absorption YTD (Units) 1,767 1,524 1,549

New Completions YTD (Units) 2,320 1,434 511


VACANCY

NET ABSORPTION

COMPLETIONS

RENTAL RATE *Projected

Historical Vacancy Rates and Rental Rates

$780

$800

$820

$840

$860

$880

$900

$920

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

2 Q 2013 3 Q 2013 4 Q 2013 1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015

Vacancy vs Rents

Vacancy Rate Average Rental Rate

Overall Asking RentsPer Unit Per Month Previous Quarter Current Quarter

Class A $1,033 $1,039

Class B/C $780 $790“Driven by three years of increasing occupancy rates, new development has come to Southern Nevada’s multifamily market.”

Vacancy Edges Up on New Completions


LAS VEGAS | MULTIFAMILYQ1 2016

> Multifamily vacancy increased in the fourth quarter of 2015; first increase in 5 years

> The increased vacancy came with increased development; 2,320 units completed in 2015

> Asking rates continued to increase despite new development

According to statistics provided by REIS, multifamily vacancy in Southern Nevada increased in the fourth quarter of 2015 (the most recent quarter of available data), ending a three year long streak. Vacancy stood at 4.9 percent in the fourth quarter, 0.2 percentage points higher than last quarter, and 0.5 percentage points lower than in the fourth quarter of 2014. Class A properties were 5.5 percent vacant in the fourth quarter, 0.3 percentage points higher than last quarter. Class B/C properties were 4.4 percent vacant, 0.1 percentage point lower than last quarter. Class A’s increase in vacancy was coupled with positive net absorption of 126 units for the fourth quarter of 2015, and almost 1,100 units for 2015 as a whole. This means vacancy increased as a result of new supply on the market, rather than falling demand.

+1.9%

NEW HOMEMedian Price

ELECTRICMeter Hookups

THIRTY YEARMortgage Rate

-0.2

Points-2.8%




0

100

200

300

400

500

600

700

800

900

2 Q 2013 3 Q 2013 4 Q 2013 1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015

Net Absorption (Units) Completions (Units)

Sales (Units) vs.Price Per Unit

$45,000

$55,000

$65,000

$75,000

$85,000

$95,000

$105,000

$115,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2 Q 2013 3 Q 2013 4 Q 2013 1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015

Total Sales (Units) Average Price Per Unit

DemographicsSubmarket

EstimatedHouseholds (2015)

RenterOccupied

MedianHousehold

AverageHousehold

Proj. Annual Growth Rental Households (2015-2020)

Downtown 49,000 59% $30,100 2.8 69

East 56,000 44% $41,000 2.7 241

Henderson/Southeast 139,000 37% $57,000 2.6 720

North Las Vegas 113,000 38% $49,000 3.1 584

Northeast 48,000 48% $38,000 3.3 194

Northwest/Southwest 148,000 33% $63,000 2.7 840

University 35,000 77% $32,000 2.2 113

West Central 106,000 54% $44,000 2.4 458

TOTAL 694,000 43% $49,000 2.7 3,521

Source: Claritas

2 Las Vegas Research & Forecast Report | Q1 2016 | Multifamily | Colliers International

All multifamily submarkets other than Northwest/Southwest and West Central showed positive net absorption in the fourth quarter of 2015. In both cases, the completion of new properties in the Northwest/Southwest submarket are likely the culprit, since negative net absorption in the Northwest/Southwest submarket took place in Class B/C properties. This could be explained by people moving from older properties to newer properties within that submarket. West Central negative net absorption was in Class A properties. Again, this could be explained by people moving from newer properties in the West Central submarket to new properties in the more upscale Northwest/Southwest submarket.

Three new multifamily projects were completed in the fourth quarter of 2015 in the Northwest/Southwest submarket. They totaled 886 units, bringing year-to-date completions up to 2,320 units. Another 383 units will be completed in the first quarter of 2016, and another 659 units will be completed in the first half of 2016. A total of 1,605 units of multifamily are under construction in the Valley, with another 1,345 units planned to begin construction within the next twelve months.

Asking rents for multifamily stood at $925 per unit in the fourth quarter of 2015, increasing by $47 psf year-over-year, and only $15 per unit since last quarter. One would expect that this rise came primarily as a result of the completion of new properties, but while Class A properties saw asking rates increase by $4 per unit, older Class B/C properties saw a $10 per unit increase in asking rents.

Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January 2015. Unemployment averaged 6.9 percent in 2015, compared to 7.8 percent in 2014. Since January 2015, total employment in Southern Nevada increased by 32,600 jobs, the majority of those new jobs being in healthcare (+7,700 jobs), professional and business services (+6,500 jobs), and construction (+6,000 jobs). The leisure & hospitality sector actually lost 3,700 jobs over the past twelve months, a result of resort closures that will likely persist until the completion of the Resorts World Las vegas project.

3

Sales Data

2016 YTD 2015 2014 2013 2012

Units Sold 3,324 15,408 14,019 17,808 21,840Average Price Per Unit $108,200 $71,836 $73,627 $75,600 $65,425Cap Rate* n/a 7.3% 7.5% 7.9% 8.2%*Cap Rate Source: Real Capital Analytics, CoStar and Colliers International

Complex Under Construction Submarket Units

Elysian at Hacienda Northwest/Southwest 466

Spencer/St Rose Apartments Henderson 348

South Beach Apartments Northwest/Southwest 220

The Mercer Northwest/Southwest 177

Elysian at Summerlin Centre Northwest/Southwest 124

Vue at Centennial Northwest/Southwest 111

Warmington Martin Apartments Northwest/Southwest 90

Prestige Apartments Northwest/Southwest 69

TOTAL 1,605

Casa Sorento


According to data provided by the Nevada Department of Motor Vehicles, the number of out-of-state driver’s licenses turned in to the DMV was 61,555 in 2015. This is lower than in 2014 when they reported 63,884 out-of-state licenses turned in, and suggests that population growth, despite rebounding from the lows of the Great Recession, remains sluggish by Clark County’s standards. Since Las Vegas’s birth in 1905, population growth has been a major driver of economic growth. In the past, population growth was driven by the Valley’s low unemployment rate and retirees looking to escape the dramatic weather and high cost of living elsewhere in the United States.

Multifamily sales increased in the fourth quarter of 2015 compared to the third quarter, with 5,323 units selling at an average sales price per unit of $60,514. For 2015 as a whole, 15,408 units sold with sales volume of $1.1 billion. Preliminary sales numbers for the first quarter of 2016 stood at 3,324 units with sales volume of $359.7 million and an average sales price of $108,223 per unit. This is a significantly higher average sales price that in 2015, and points to investment, mostly from out of state buyers, in newer properties.

Driven by three years of increasing occupancy, new development has come to Southern Nevada’s multifamily market. 2015 saw 2,320 units added to inventory, and 2016 will add another 1,988 units to inventory. In the fourth quarter of 2015, vacancy increased – possibly the result of inventory expansion. The vacancy increase was minor, and we think similar increases will continue in 2016, though likely not to the overall detriment of the market. Rental rates are still on the rise for now, but if vacancy continues to rise rents may well waver.

NORTHWEST

EAST

NORTHEAST

SOUTHWESTHENDERSON/

GREEN VALLEY

DOWNTOWN

SUMMERLIN WEST

15

215

215

95

95

Significant Multifamily Sales Activity

80 Gibson Road308 Units - $37,300,000

$121,100/Unit

December 2015

Year Built - 1997

Boulders at Lone Mountain

388 Units - $55,400,000

$142,800/Unit

March 2016

Year Built - 2001

Black Mountain Villas296 Units - $48,200,000

$162,800/Unit

January 2016

Year Built - 2006

Montego Bay Apartments420 Units - $51,100,000

$121,700/Unit

March 2016

Year Built - 1992

Domain Apartments308 Units - $58,200,000

$188,961/Unit

January 2016

Year Built - 2014


Sales Activity Continued

Property Name Sale Date Units Price Price/Unit Year Built

Broadstone Sonata Jan 2016 312 $35.0 MM $112,200 2009

Bacara at Southshores Feb 2016 212 $25.0 MM $117,900 1990

Silver Shadow Apartments Dec 2015 200 $22.6 MM $113,000 1992

Sonoma Point Mar 2016 198 $20.8 MM $105,200 1990

The Enclave Feb 2016 258 $16.0 MM $62,000 1978

Source: Real Capital Analytics


Multifamily Market

CLASSTOTAL

INVENTORY UNITS

CURRENT VACANCY RATE

PRIOR QTR VACANCY RATE

NET ABSORPTION

NET ABSORPTION YTD UNITS

CURRENT QTR COMPLETIONS

YTD UNIT COMPLETIONS

UNDER CONSTRUCTION

UNITS


UNITS

TOTAL SALES UNITS

AVERAGE PRICE PER UNIT

AVERAGE RENTAL RATE

DOWNTOWN

A 2,773 1.7% 1.6% (1) 29 - 80 - 231 - n/a $884B/C 13,454 1.9% 2.1% 26 182 - - - - 2,016 $51,453 $747Total 16,227 1.9% 2.6% 25 211 - 80 - 231 2,016 $51,453 $770

EAST LAS VEGAS

A 6,383 4.1% 4.1% 1 33 - - - - n/a $881B/C 8,939 3.3% 3.7% 36 134 - - - - 734 $43,747 $758Total 15,322 3.6% 4.4% 37 167 - - - - 734 $43,747 $810

HENDERSON/GREEN VALLEY

A 19,507 7.7% 6.5% 102 556 994 569 - - n/a $1,123

B/C 8,068 8.0% 8.5% 39 (8) - - - 1,089 $75,533 $980Total 27,575 7.8% 6.9% 141 548 - 994 569 - 1,089 $75,533 $1,081

NORTH LAS VEGAS

A 12,920 5.2% 5.3% 11 116 - - - - - n/a $931B/C 9,552 5.4% 5.4% - 87 - - - - - n/a $739Total 22,472 5.3% 5.9% 11 203 - - - - - n/a $849

NORTHEAST

A 2,172 5.2% 5.1% (2) (11) - - - - - n/a $815B/C 6,643 7.9% 8.1% 18 164 - - - - 1,100 $60,882 $724Total 8,815 7.2% 8.3% 16 153 - - - - 1,100 $60,882 $745

NORTHWEST/SOUTHWEST

A 16,567 5.7% 6.0% 50 318 886 1,246 1,257 1,114 - n/a $1,172B/C 5,452 4.5% 3.2% (72) (81) - - - - 384 $96,484 $1,044Total 22,019 5.4% 4.8% (22) 237 886 1,246 1,257 1,114 384 $96,484 $1,140

UNIVERSITY

A 2,180 1.9% 1.3% (14) 32 - - - - - n/a $961B/C 12,321 4.8% 5.0% 21 142 - - - - - n/a $717Total 14,501 4.4% 4.9% 7 174 - - - - - n/a $753

WEST CENTRAL

A 5,671 2.8% 2.4% (21) 25 - - - - - n/a $968B/C 6,860 1.0% 4.3% (6) 49 - - - - - n/a $757Total 12,531 1.8% 2.0% (27) 74 - - - - - n/a $853

MARKET TOTAL

A 68,173 5.5% 5.2% 126 1,098 886 2,320 1,826 1,345 - n/a $1,039B/C 71,289 4.4% 4.5% 62 669 - - n/a n/a 5,323 $60,514 $790Total 139,462 4.9% 5.4% 188 1,767 886 2,320 1,826 1,345 5,323 $60,514 $925


Q4-15* 139,462 4.9% 4.7% 188 1,767 886 2,320 1,826 1,345 5,323 $60,514 $925Q3-15 138,576 4.7% 4.8% 135 1,524 324 1,434 1,216 1,704 3,887 $73,685 $910Q2-15 138,576 4.8% 5.1% 647 1,389 840 1,110 1,617 2,222 2,626 $77,603 $906Q1-15 137,736 5.1% 5.4% 742 742 270 270 1,617 2,222 3,572 $82,458 $889Q4-14 137,466 5.4% 5.3% 370 1,549 170 511 1,617 2,222 3,572 $82,458 $878Q3-14 137,296 5.3% 5.5% 348 1,179 - 341 729 601 3,886 $70,279 $873Q2-14 137,296 5.5% 5.8% 608 831 255 341 985 601 2,262 $84,836 $866

* Most recent quarter of dataSource: REISSales Data provided by Colliers International


+10.1%

HEALTHCARESpending

HEALTHCAREEmployment

+21.0

MEDICALSF/Job

-8.4%

Q12016

Economic Indicators


Vacancy Rate 17.0% 16.7% 17.2%

Asking Rent (PSF, FSG) $2.17 $2.19 $2.16

Net Absorption YTD (SF) -21,820 -21,859 75,113

New Completions YTD (SF) 0 0 0


VACANCY

NET ABSORPTION

COMPLETIONS

RENTAL RATE *Projected

Historical Vacancy Rates and Rental Rates

$2.11

$2.12

$2.13

$2.14

$2.15

$2.16

$2.17

$2.18

$2.19

12.0%

13.0%

14.0%

15.0%

16.0%

17.0%

18.0%

19.0%

20.0%

1 Q 2014

2 Q 2014

3 Q 2014

4 Q 2014

1 Q 2015

2 Q 2015

3 Q 2015

4 Q 2015

1 Q 2016

Vacancy Rate Rental Rate


Class A $2.59 $2.59

Class B $2.25 $2.23

Class C $1.80 $1.79“Spending on ambulatory health care, which does not include hospitals and which has the largest impact on the medical office space, saw a 13.3 percent year-over-year increase in 2015.”

Medical Growth … But Not in Medical Office


LAS VEGAS | MEDICAL OFFICEQ1 2016

> Medical office has lapsed back into negative net absorption

> Strong gains in healthcare spending and employment created hope for a reversal of fortunes in 2016; they may be yet to come

> Asking rates, which were on the rise despite low demand, took a step back in the first quarter

Southern Nevada’s medical office market managed a positive 2015 due to strong positive net absorption in the first half of the year, and despite negative net absorption in the last half of the year. Unfortunately, the first quarter of 2016 has continued the negative net absorption trend, with net absorption this quarter of negative 21,820 square feet. This increased vacancy to 17.0 percent, 0.3 points higher than one quarter ago, though fortunately 0.2 points lower than one year ago. The weighted average asking rental rate remained fairly stable, dropping to $2.17 per square foot (psf) on a full service gross (FSG) basis. This was only $0.02 from last quarter.




-120,000

-100,000

-80,000

-60,000

-40,000

-20,000

0

20,000

40,000

60,000

80,000

100,000

1 Q 2014

2 Q 2014

3 Q 2014

4 Q 2014

1 Q 2015

2 Q 2015

3 Q 2015

4 Q 2015

1 Q 2016


Healthcare Jobs vs.Occupancy Rate

13,400

13,900

14,400

14,900

15,400

15,900

16,400

80.0%

80.5%

81.0%

81.5%

82.0%

82.5%

83.0%

83.5%

84.0%

1 Q 2014

2 Q 2014

3 Q 2014

4 Q 2014

1 Q 2015

2 Q 2015

3 Q 2015

4 Q 2015

1 Q 2016

Healthcare Jobs Occupancy Rate

2 Las Vegas Research & Forecast Report | Q1 2016 | Medical Office | Colliers International

According to the Nevada Department of Employment, Training and Rehabilitation, Southern Nevada’s medical office job market improved in January 2016 (the latest month of data available) compared with January 2015, adding approximately 6,100 jobs in the past twelve months. This does not include jobs at hospitals. Employment that directly impacted medical office projects increased by approximately 1,535 jobs. Unemployment in the Las Vegas-Paradise MSA stood at 6.5 percent as of January 2016, down from 7.5 percent in January 2015. From January 2015 to January 2016, total employment in Southern Nevada has increased by 32,600 jobs.

According to the Nevada Department of Taxation, taxable spending on ambulatory health care services in Clark County in 2015 totaled $99.8 million dollars. This represented a 20.5 percent increase in health care spending, though it should be pointed out that that increase in health care spending does not necessarily translate into an increase in the amount of care provided, an important factor when looking at the impact of spending on demand for medical real estate. Where the money is being spent is also important. Spending on ambulatory health care, which does not include hospitals and which has the largest impact on the medical office space, saw a 13.3 percent year-over-year increase in 2015. Spending in hospitals, by comparison, increased by 48.5 percent. This jibes with anecdotal evidence that hospital campuses are the prime beneficiaries of the ACA.

The last time medical office space was completed in Southern Nevada was during the fourth quarter of 2011, when 57,600 square feet was added to inventory. A new hospital at Union Village is now under construction. When it is completed, development of 150,000 square feet of medical office and 190,000 square feet of retail space will follow, though this could still be 15-20 months away. Additional medical office projects are planned on Cimarron Road and Tenaya Way, totaling 211,000 square feet. On the hospital front, several new small hospitals for urgent or emergency care are planned in the valley, including the 100,000 square foot Southern Hills Emergency Hospital at Desert Inn & Fort Apache, and four small hospitals being developed by Dignity Health at Craig & Camino Al Norte, Blue Diamond & Decatur, Flamingo & I-215 and Decatur & Sahara.

Vacancy in medical office space increased in the first quarter of 2016 to 17.0 percent, from 16.7 percent in the fourth quarter of 2015. Despite this increase in quarter-over-quarter vacancy, current vacancy is 0.2 points lower than one year ago in the first quarter of 2015. The highest vacancy rates in the first quarter of 2016 were in the Southwest (35.0 percent), Downtown (23.9 percent) and Airport (20.2 percent) submarkets. Downtown formerly had the lowest vacancy rate among submarkets. The new champion is the Henderson submarket, with 11.2 percent vacancy. Vacancy decreased in Airport, East Las Vegas and Southwest, and increased in Downtown, Henderson, North Las Vegas, Northwest and West Central. It should be mentioned that vacancy increased by less than half a point in Henderson, Northwest and West Central.

3

Desert Perinatal Associates | 5761 Fort Apache


After 120,371 square feet of positive net absorption in 2015, Southern Nevada posted negative 21,820 square feet of net absorption in the first quarter of 2016. This was actually the third straight quarter with negative net absorption, following three quarters of positive net absorption. On the bright side, the three quarters of positive net absorption (187,011 square feet) outweighed the three quarters of negative net absorption (50,485 square feet), indicating that while Southern Nevada’s medical office market lacks stability, it is slowly recovering.

The weighted average asking rental rate for medical office space in the first quarter of 2016 was $2.17 per square foot (psf) on a full service gross (FSG) basis. Asking rents in the first quarter of 2016 were $0.02 psf lower than one quarter ago (not surprising given three quarters of sub-par demand) and $0.01 higher than one year ago. In leases we have tracked over the past four quarters, effective lease rates for medical office leases have averaged 104.2 percent of asking lease rates, which suggests that asking rates are appropriate for current market conditions, and may continue to increase at a moderate clip through 2016 provided demand for medical space increases. The Valley’s highest average asking rate was in the Northwest submarket, at $2.44 psf FSG, followed closely by Henderson’s $2.42 psf. The lowest average asking rate was in the West Central submarket, at $1.81 psf, followed by East Las Vegas with $1.89 psf. Lease rates increased this quarter in Downtown, Henderson, North Las Vegas and West Central, and decreased in Airport, East Las Vegas and Southwest.

Investment sales volume of medical office so far in 2016 amounted to almost $7 million in two sales totaling 21,700 square feet, with an average sales price of $321.89 per square foot. These buildings had an average cap rate of 6.8 percent. For comparison’s sake, investment sales volume in 2015 was almost $80 million.

Owner/user sales volume of medical office space in 2015 was $40.9 million in 12 sales totaling 120,543 square feet. The average sales price was $339.03. For comparison’s sake, owner/user sales volume in 2014 was only $12.1 million, with an average sales price of $159.36. In the first quarter of 2016 there was one own/user medical sale of a 5,000 square foot building for $1.3 million.

The recovery of Southern Nevada’s medical office market after the Great Recession has been rough and unstable. In 2015, it looked as though, despite two weak quarters, the recovery was picking up steam. A third weak quarter in a row, though, would tend to point to more of the same – two steps forward, one step back. The professional office market followed a similar trajectory two years ago, but now appears to be in a stable recovery. Perhaps the medical office market will do the same. It does have two significant headwinds – competition from other types of commercial real estate, and market distortions created by the ACA. Hopefully, higher spending on healthcare is not entirely the result of increases in prices and deductibles, and healthcare employment growth will translate into more demand for medical office space over the remainder of 2016.

NORTHWEST

EASTLAS VEGAS

NORTHLAS VEGAS

SOUTHWEST

WESTCENTRAL

AIRPORT

HENDERSON

DOWNTOWNSUMMERLIN

15

215

215

95

95

Significant Medical Office Sales Activity

Sienna Pavilion65,300 - $27,900,000

$426.63/SF

December 2015

Class A

Horizon Ridge Professional Park5,993 SF - $1,325,000

$221.09/SF

November 2015

Class C

Sienna Pavilion II64,700 SF - $20,000,000

$308.67/SF

December 2015

Class A

Desert Radiology18,000 SF - $6,400,000

$354.17/SF

February 2015

Class C

Pavell Medical Center50,500 - $6,200,000

$122.67/SF

October 2015

Class C


Significant Lease Activity

Property Name Lease Date Lease Term Size Lease Rate Tenant

Siena Pavilion Dec 2015 36 months 4,400 SF $1.29 NNN Physicians

Stonecreek Spring Valley Medical Sep 2015 84 months 3,500 SF $0.86 NNN Physician

Flamingo Road Mar 2016 63 months 3,000 SF $0.97 MG Non-Medical

Rainbow Office Complex Sep 2015 40 months 2,000 SF $0.87 NNN Physician

Campbell Court Feb 2016 36 months 1,700 SF $1.25 NNN Laboratory


Medical Office Market

TYPETOTAL

INVENTORYSF

DIRECTVACANT SF

DIRECTVACANCY

RATE

SUBLEASE VACANT SF

TOTALVACANT

SF

VACANCYRATE

CURRENT QUARTER

VACANCY RATEPRIOR

QUARTER

NET ABSORPTION

CURRENT QTR SF

NET ABSORPTION

YTDSF


COMPLETIONS YTD SF

UNDER CONSTRUCTION

SF


SF

WEIGHTEDAVG ASKING

RENTALRATE

AIRPORT SUBMARKET

A - - n/a - - n/a n/a - - - - - - $- B - - n/a - - n/a n/a - - - - - - $- C 38,000 7,690 20.2% - 7,690 20.2% 33.4% 5,000 5,000 - - - - $1.92 Total 38,000 7,690 20.2% - 7,690 20.2% 33.4% 5,000 5,000 - - - - $1.92

DOWNTOWN SUBMARKET

A 65,000 - 0.0% - - 0.0% 0.0% - - - - - - $- B 227,301 82,643 36.4% - 82,643 36.4% 11.9% (55,617) (55,617) - - - - $1.97 C 75,131 5,018 6.7% - 5,018 6.7% 6.7% - - - - - - $1.74 Total 367,432 87,661 23.9% - 87,661 23.9% 8.7% (55,617) (55,617) - - - - $1.96


A - - n/a - - n/a n/a - - - - - - $- B 669,264 143,144 21.4% - 143,144 21.4% 23.4% 11,552 11,552 - - - - $2.13 C 629,240 72,439 11.5% - 72,439 11.5% 15.5% 24,880 24,880 - - - - $1.42 Total 1,298,504 215,583 16.6% - 215,583 16.6% 19.6% 36,432 36,432 - - - - $1.89

HENDERSON SUBMARKET

A 421,834 49,395 11.7% - 49,395 11.7% 12.5% 3,516 3,516 - - - 80,000 $3.00 B 309,703 65,899 21.3% 2,515 68,414 22.1% 19.2% -8,889 (8,889) - - - - $2.15 C 604,238 41,785 6.9% - 41,785 6.9% 7.1% 933 933 - - - - $2.16 Total 1,335,775 157,079 11.8% 2,515 159,594 11.9% 11.6% (4,440) (4,440) - - - 80,000 $2.42


A - - n/a - - n/a n/a - - - - - - $- B 43,921 5,356 12.2% - 5,356 12.2% 13.2% 444 444 - - - - $2.34 C 148,668 31,525 21.2% - 31,525 21.2% 14.7% (9,625) (9,625) - - - - $2.10 Total 192,589 36,881 19.2% - 36,881 19.2% 14.4% (9,181) (9,181) - - - - $2.13

NORTHWEST SUBMARKET

A 807,173 144,060 17.8% - 144,060 17.8% 19.6% 14,428 14,428 - - - 80,251 $2.57 B 1,031,717 145,596 14.1% - 145,596 14.1% 12.1% (20,354) (20,354) - - - - $2.37 C 202,434 10,353 5.1% - 10,353 5.1% 5.1% - - - - - - $1.67 Total 2,041,324 300,009 14.7% - 300,009 14.7% 14.4% (5,926) (5,926) - - - 80,251 $2.44

SOUTHWEST SUBMARKET

A 115,300 51,599 44.8% - 51,599 44.8% 41.4% (3,855) (3,855) - - - - $2.27 B 380,926 163,389 42.9% 4,440 167,829 44.1% 49.5% 20,888 20,888 - - - 131,680 $2.32 C 275,170 54,948 20.0% - 54,948 20.0% 19.9% (224) (224) - - - - $2.01 Total 771,396 269,936 35.0% 4,440 274,376 35.6% 37.7% 16,809 16,809 - - - 131,680 $2.25


A - - n/a - - n/a n/a - - - - - - $- B 291,027 21,290 7.3% - 21,290 7.3% 7.3% - - - - - - $2.35 C 867,706 129,434 14.9% - 129,434 14.9% 14.4% (4,897) (4,897) - - - - $1.72 Total 1,158,733 150,724 13.0% - 150,724 13.0% 12.6% (4,897) (4,897) - - - - $1.81 MARKET TOTALA 1,409,307 245,054 17.4% - 245,054 17.4% 18.4% 14,089 14,089 - - - 160,251 $2.59 B 2,953,859 627,317 21.2% 6,955 634,272 21.5% 19.8% (51,976) (51,976) - - - 131,680 $2.23 C 2,840,587 353,192 12.4% - 353,192 12.4% 13.0% 16,067 16,067 - - - - $1.79 Total 7,203,753 1,225,563 17.0% 6,955 1,232,518 17.1% 16.8% (21,820) (21,820) - - - 291,931 $2.17


Q1-16 7,203,753 1,225,563 17.0% 6,955 1,232,518 17.1% 16.8% (21,820) (21,820) - - - 291,931 $2.17

Q4-15 7,203,753 1,203,743 16.7% 8,955 1,212,698 16.8% 16.7% (21,859) 120,371 - 16,000 - 361,931 $2.19

Q3-15 7,203,753 1,181,884 16.4% 22,436 1,204,320 16.7% 16.6% (6,806) 142,230 - 16,000 - 361,931 $2.18 Q2-15 7,203,753 1,175,078 16.3% 20,245 1,195,323 16.6% 17.4% 73,923 149,036 16,000 16,000 - 131,680 $2.18 Q1-15 7,187,753 1,233,001 17.2% 15,002 1,248,003 17.4% 18.4% 75,113 75,113 - - - 131,680 $2.16 Q4-14 7,187,753 1,308,114 18.2% 15,002 1,323,116 18.4% 18.9% 37,975 (94,283) - - - 131,680 $2.16 Q3-14 7,187,753 1,346,089 18.7% 15,002 1,361,091 18.9% 17.5% (101,664) (132,258) - - - - $2.17


+7.6%

CONVENTIONAttendance

AIRPassengers

+12.5

RevPAR

+10.4%

Q12016


Room Inventory 146,340 146,340 149,738

Room Occupancy 84.7% 85.9% 85.0%

Average Daily Rate $144.88 $121.51 $124.46

Revenue Per Available Room $122.71 $105.06 $105.79


Room Inventory

Room Occupancy

Average Daily Rate

Revenue Per Available Room

*Projected

Revenue Per Available Room (RevPar)

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

4 Q 2013 1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015 3 Q 2015 4 Q 2015

RevPAR

Hospitality Stays Strong


LAS VEGAS | HOTELQ1 2016

> Visitor volume hit a new record in 2015, and is off to a good start in 2016

> Gaming revenue continued to lag, but is becoming less important to the diversified resorts

> Room inventory may expand by the end of 2016, and will probably expand further in 2017

2016 has only just begun, but so far Southern Nevada’s hospitality market appears to have extended its winning streak. Visitor volume numbers were strong in January (the most recent month of data), and on pace to match the record visitor volume of 42.3 million people in 2015. Room occupancy, average daily room rate (ADR) and revenue per available room (RevPAR) all showed improvement in January 2016 compared to January 2015.

Gaming revenue was once again the only bad mark on an otherwise stellar Hospitality industry performance, showing year-over-year growth of negative 3.3 percent for Clark County as a whole, and negative 7.7 percent growth on the Las Vegas “Strip”. Downtown gaming revenue increased by 8.8 percent year-over-year, however, and the Boulder Strip posted 16.1 percent gaming revenue growth. Southern Nevada’s resort and hospitality operators started diversifying their entertainment venues during the Great Recession, and those moves have paid off. Millennials in particular appear less likely to partake in gaming than Baby Boomers, but they are still coming to Las Vegas to enjoy other attractions.

Economic Indicators



SalesVolume

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$1,600,000,000

$1,800,000,000

$2,000,000,000

1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015 3 Q 2015 4 Q 2015 1 Q 2016

Sales Volume

Sales vs.Price Per Unit

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1 Q 2014 2 Q 2014 3 Q 2014 4 Q 2014 1 Q 2015 2 Q 2015 3 Q 2015 4 Q 2015 1 Q 2016

Sales vs. Price Per Unit

Sales (Units) Average Price Per Unit

Market HealthData Point 2016 YTD* 2015 2014 2013 2012

Visitor Volume (Millions) 3.5 42.3 41.6 39.9 39.7

Room Occupancy 84.7% 87.7% 86.8% 84.3% 84.4%

ADR $144.88 $119.94 $116.48 $110.64 $108.02

RevPAR $122.71 $105.21 $101.05 $93.27 $91.17

Convention Attendance (Millions) 0.77 5.71 5.17 5.11 4.93

Passengers McCarran Int’l (Millions) 3.6 45.3 42.9 41.8 41.7

Gaming Revenue (Clark County, Billions) $0.8 $9.6 $9.6 $10.0 $9.4

Gaming Revenue (“Strip”, Billions) $0.5 $7.5 $6.4 $6.5 $6.2

Data from Las Vegas Convention & Visitors Authority

* Data from January

2 Las Vegas Research & Forecast Report | Q1 2016 | Hospitality | Colliers International

Room inventory remained static in the first quarter of 2016, and no new closures are planned for 2016. The 201 room Lucky Dragon, under construction in the Resort Corridor, may be completed before the end of 2016, or by early 2017. The 124 room Residence Inn under construction in South Las Vegas will almost certainly be completed by the end of 2016. These two properties would represent very mild inventory growth for Southern Nevada. The much larger Resorts World Las Vegas property is currently under construction, with completion of the first phase planned for 2017.

As alluded to above, Southern Nevada’s hospitality industry is currently involved in a different kind of construction boom than we are used to, building new entertainment venues instead of new hotels. Recent non-hospitality introductions to Las Vegas include the LINQ retail district and High Roller attraction, two new zip-line attractions on the Strip and in Downtown, new retail fronting the Treasure Island and the Rock N Rio festival. 2016 will see the completion of the 20,000 seat MGM Resorts International Arena behind New York-New York and Monte Carlo, a $75 million renovation of Caesars Palace’s original Roman Tower, a new 5,000-seat theatre at the Monte Carlo, a $47 million renovation of the Thomas & Mack Center, Topgolf International’s four-story golf entertainment complex at the MGM Grand, a $23 million renovation and redevelopment of the Boulevard Mall. The LVCVA is currently undertaking a major expansion of the convention center to keep Southern Nevada at the forefront of convention destinations in the United States. In all, we expect that approximately $4.7 billion will be spent on Southern Nevada’s hospitality market between 2014 and 2016, before another $4 billion is spent developing the first phase of Resorts World Las Vegas in 2017.

A total of 927 rooms sold in Southern Nevada in the first quarter of 2016, in two properties, the Westin-Las Vegas Casuarina and the Rodeway Inn-Convention Center. Both properties are located in the Resort Corridor. Sales volume in the first quarter of 2016 was $66 million and average sales price was $72,000 per room. Final sales volume in 2015 was $854 million in 14 sales totaling 7,558 units with an average sales price of $113,000 per room. 2015 saw as many rooms selling as 2014, but at a much lower sales volume.

3

Hospitality Sales*

Year Volume Units Sold Price/Unit

2016 YTD $66 MM 927 $72,000

2015 $854 MM 7,558 $113,000

2014 $1,864 MM 7,749 $241,000

2013 $55 MM 1,129 $49,000

2012 $121 MM 2,613 $46,000

2011 $3,009 MM 7,369 $408,000

2010 $858 MM 8,883 $97,000

2009 $1,226 MM 4,913 $249,000

* Only includes properties with 100 or more units, arm’s-length sales

“2016 has only just begun, but so far Southern Nevada’s hospitality

market appeared to extend its winning streak”- John Stater, Research & GIS Manager


Southern Nevada’s hospitality market, despite strong visitor volume, has actually seen inventory fall over the past year with the closure of the Riviera and Clarion. This has been good for existing operators, increasing their occupancy and profitability. 2016 will see some inventory growth, with more possibly on the way in 2017, but in the meantime expect the existing resorts to reap the benefits.

NORTHLAS VEGASNORTHWEST

WESTCENTRAL

SOUTHWEST

SOUTHLAS VEGAS

EASTLAS VEGAS

HENDERSON

AIRPORT

SUMMERLINDOWNTOWN

THE“STRIP”

RESORTCORRIDOR

15

215

215

95

95

Significant Hotel Sale Activity

Renaissance Las Vegas HotelResort Corridor - $111,000,000

548 Units - $203,000/Unit

July 2015

Full Service

Westin - Las Vegas CasuarinaResort Corridor - $67,000,000

826 Units - $81,000/Unit

January 2016

Casino Hotel

Riviera Hotel*Strip - $182,500,000

2,100 Units - $87,000/Unit

February 2015

Casino Hotel

Tropicana Las VegasStrip - $360,000,000

1,497 Units - $240,000/Unit

December 2015

Casino Hotel

Hooters Casino HotelResort Corridor - $54,000,000

696 Units - $77,000/Unit

May 2015

Casino Hotel


Sale Activity Continued

Property Name Sale Date Units Price Price/Unit Submarket Property Type

Las Vegas Club Casino Aug 2015 410 $40,000,000 $98,000 Downtown Casino HotelWestin-Lake Las Vegas Dec 2015 493 $25,000,000 $51,000 Henderson Full ServiceTownplace Suites Feb 2015 228 $20,000,000 $88,000 Henderson Limited ServiceHyatt Place-Las Vegas Feb 2015 202 $19,000,000 $94,000 Resort Corridor Full ServiceRodeway Inn Jan 2016 101 $6,100,000 $60,000 Resort Corridor Limited Service* Indicates a redevelopment site


Hospitality Market

TYPE TOTAL INVENTORY UNITS SOLD SALES VOLUME PRICE/UNIT COMPLETIONS THIS QUARTER COMPLETIONS YTD PLANNED

DOWNTOWN

CAS 7,589 - $0 n/a - - - FS - - $0 n/a - - - LS 938 - $0 n/a - - - Total 8,527 - $0 n/a - - -

LAS VEGAS “STRIP”

CAS 79,309 - $0 n/a - - 4,600 FS 7,543 - $0 n/a - - - LS 581 - $0 n/a - - -

Total 87,433 - $0 n/a - - 4,600

RESORT CORRIDOR

CAS 11,273 826 $66,530,000 $80,545 - - 201 FS 5,091 - $0 n/a - - - LS 6,285 101 $60,396 $598 - - - Total 22,649 927 $66,590,396 $71,834 - - 201

AIRPORT

CAS - - $0 n/a - - - FS - - $0 n/a - - - LS 841 - $0 n/a - - - Total 841 - $0 n/a - - -


CAS 1,913 - $0 n/a - - - FS - - $0 n/a - - - LS 2,571 - $0 n/a - - - Total 4,484 - $0 n/a - - -

HENDERSON SUBMARKET

CAS 2,281 - $0 n/a - - - FS 868 - $0 n/a - - - LS 1,480 - $0 n/a - - - Total 4,629 - $0 n/a - - -


CAS 1,021 - $0 n/a - - - FS - - $0 n/a - - - LS 1,611 - $0 n/a - - - Total 2,632 - $0 n/a - - -

SOUTH LAS VEGAS SUBMARKET

CAS 2,853 - $0 n/a - - - FS 2,704 - $0 n/a - - - LS 1,206 - $0 n/a - - 124 Total 6,763 - $0 n/a - - 124

SUMMERLIN SUBMARKET

CAS 1,789 - $0 n/a - - - FS 123 - $0 n/a - - - LS 857 - $0 n/a - - - Total 2,769 - $0 n/a - - - WEST CENTRAL SUBMARKETCAS 3,425 - $0 n/a - - - FS - - $0 n/a - - - LS 2,188 - $0 n/a - - - Total 5,613 - $0 n/a - - - MARKET TOTALCAS 111,453 826 $66,530,000 $80,545 - - 4,801 FS 16,329 - $0 n/a - - - LS 18,558 101 $60,396 n/a - - 124 Total 146,340 927 $66,590,396 $71,834 - - 4,925


Q1-16 146,340 927 $66,590,396 $71,834 0 0 4,925 Q4-15 146,340 2,241 $392,913,841 $175,330 0 -3,600 3,634 Q3-15 146,340 958 $151,000,000 $157,620 -410 -3,600 3,634 Q2-15 146,750 2,499 $442,001,950 $176,872 -2,988 -3,190 4,169 Q1-15 149,738 2,888 $243,075,470 $84,167 -202 -202 4,124 Q4-14 149,940 128 $5,375,000 $41,992 0 1,955 4,124


Economic Indicators


NO. SALES

ACREAGE SOLD

SALES VOLUME

PRICE PER SQUARE FOOT

*Projected

Land Sales Activity

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

0

200

400

600

800

1,000

1,200

1,400

Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16

Land Sales Activity

ACREAGE SOLD PRICE PER SQ. FT.

The Calm Before the Storm


LAS VEGAS | LANDQ1 2016

In terms of acreage sold, the first quarter of 2016 was the best first quarter Southern Nevada has had in five years, with 1,224 acres sold in 87 sales. The sales volume of $171.7 million recorded in the first quarter of 2016 was not, however, the highest sales volume in five years. In fact, it’s in second place behind the $213.7 million in the first quarter of 2014, and just barely ahead of the $170.6 million recorded in the first quarter of 2015. The reason for this disparity was an especially large sale of land in Apex, the industrial area located to the northeast of the Las Vegas Valley.

Industrial occupancy decreased in the first quarter of 2016 to 94.4 percent, a 0.1 percentage point decrease compared to the fourth quarter of 2015. This rise in industrial vacancy was a result of the completion of a large warehouse/distribution building without pre-leasing. It may not be the last, as at least four more warehouse/distribution buildings that are not approximately 46 percent pre-leased are slated for completion in 2016. A total of 955,082 square feet of industrial space was completed in the first quarter of 2016 on 49.1 acres. An additional 6.4 million square feet of industrial space is either under construction or planned on 464.5 acres of land. During the first quarter of 2016, 793.82 acres of industrial land was sold, with total sales volume of $11.8 million. The average sales price of industrial land was $0.34 psf, a significant decrease from one year ago but predicated on a very large land sale in Apex. Ignoring the sale of 753 acres in Apex, the average sales price of industrial land would be $4.32 psf on 40 acres sold.

Commercial occupancy increased in the first quarter of 2015 to 87.4 percent, 0.6 percentage points higher than in the first quarter of 2015. Demand for office and retail product, while still not as strong as for industrial space, has been positive since 2015, with the retail market entering its second expansion phase since the end of the Great

> Land sales were up in the first quarter of 2016 in terms of acreage

> Development continues to be strong for multifamily properties, but might be slowing for industrial properties

> Land prices remained stable in Q1 of 2016 when one discounts a large sale of industrial land in the Apex industrial area

RESIDENTIALPermits

COMMERCIALForward Supply

COMMERCIALPermits

-4.2

Percent

+75.9

Percent

+16.1

Percent



2

Market Health

Data Point 2016 2015 2014

Commercial Building Occupancy 87.4% 86.9% 86.4%

Industrial Building Occupancy 94.4% 94.5% 90.5%

Hotel Occupancy (Annual Avg.) 84.7% 87.7% 86.8%

New Home Sales (Jan) 382 355 401

Commercial Permits (Jan)1 23 24 32

Residential Permits (Jan-Jun) 737 419 552

Commercial Forward Supply2 (SF) 1.50 MM 1.66 MM 1.57 MM

Industrial Forward Supply2 (SF) 6.43 MM 9.29 MM 3.93 MM

Hotel Forward Supply2 (Rooms) 4,801 3,634 4,124

Taxable Sales (Jan-Dec) -3 $38.6 BB $36.1 BB

Employment (Average) 920,0003 908,600 874,5001 Includes permits for industrial projects2 Includes projects that are under construction or planned

Land Sales

Year Sales Volume Acres Sold Price/SF

2016 $171.7 MM 1,224 $3.22

2015 $625.9 MM 2,302 $6.24

2014 $763.2 MM 2,761 $6.35

2013 $613.3 MM 2,636 $5.34

2012 $264.1 MM 1,374 $4.41

2011 $160.1 MM 803 $4.58

2010 $51.3 MM 172 $6.86

2009 $198.0 MM 599 $7.65

Commercial Land Sales Activity

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

0

50

100

150

200

250

300

Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16

Commercial Land Sales Activity


Residential Land Sales Activity

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

0

100

200

300

400

500

600

700

800

Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16

Residential Land Sales Activity


2 Las Vegas Research & Forecast Report | Q1 2016 | Land | Colliers International

Recession. Speculative construction of office and anchored retail projects should remain light in 2016. Completions of commercial product stood at 80,000 square feet in the first quarter of 2016, on 4.76 acres. An additional 2.6 million square feet of commercial product is under construction or planned on 631.7 acres. Hotel occupancy in January 2016 was 84.7 percent. Hotel occupancy has generally been on the rise over the past three years, and reductions in room inventory should keep this trend going in 2016. Over 4,900 new rooms are under construction or planned in Southern Nevada on more than 108.3 acres. During the first quarter of 2016, 113.82 acres of commercial land was sold. Total commercial land sales volume was $50.9 million. The average sales price of commercial land was $10.27 psf, an increase of $4.97 psf from one year ago.

Development of single-family residential has lagged for the past three years, while multifamily residential development is now on the rise. New home sales totaled 6,773 units in 2015. In January of 2016, 382 new single-family homes sold, more than in January 2015. Residential permits totaled 737 in the first month of 2016, compared to 419 units permitted in the first month of 2015. A lack of improved lots should keep development of single-family homes low for now, and it is unlikely that 2016 will see an explosion in single-family residential construction due affordability issues. During the first quarter of 2015, 316.4 acres of residential land was sold. Total residential land sales volume was $109.0 million. The average sales price of residential land was $7.91 psf, a significant increase from one year ago.

Commercial development in Southern Nevada, while still lackluster compared to the boom of the mid-2000’s, is generally on the rise and getting healthier. This suggest increased commercial and industrial land sales in the near future, as developers run out of vacant land already in their possession. Unfortunately, commercial and industrial land is only part of the story. Residential development remains light. Population growth has recovered in Southern Nevada, but remains low compared to growth in the pre-Great Recession era. A lack of single-family development will keep residential land sales relatively light, and thus land prices stable rather than growing.

NORTHWEST

EASTLAS VEGAS

NORTHLAS VEGAS

NORTHEASTDOWNTOWN

SOUTHWEST

SUMMERLIN

WESTLAS VEGAS

AIRPORT

HENDERSON

15

215

215

95

95

Tropicana & Koval42.0 Acres - $50,000,000

$27.33/SF

December 2015

Commercial - Resort Corridor

Significant Land Sale Activity

Blue Diamond & Buffalo24.3 Acres - $10,500,000

$9.94/SF

September 2015

Commercial - Southwest

Capovilla & Rainbow9.07 Acres - $8,200,000

$20.75/SF

December 2015

Residential - Southwest

Patrick & Interstate 21514.0 Acres - $5,800,000

$9.53/SF

January 2016

Commercial - Airport

Wigwam & Stephanie32.1 Acres - $10,150,000

$9.35/SF

November 2015

Residential - Henderson


Land Sale Activity Continued

Major Cross Streets Sale Date Acres Price Price/SF Submarket Land Type

Executive Airport & Volunteer Sep 2015 28.0 $5,630,000 $4.62 Henderson Industrial

Hualapai & Serene Nov 2015 18.2 $5,000,000 $6.32 Southwest Residential

Elkhorn & Hualapai Oct 2015 20.3 $4,425,000 $5.01 Southwest Residential

Blue Diamond & Decatur Oct 2015 3.7 $4,000,000 $25.16 Southwest Commercial

Rafael Rivera & Rainbow Sep 2015 8.1 $4,000,000 $19.01 Southwest Residential


Land Market

SUBMARKET SALES ACREAGE SOLD SALES VOLUME AVERAGE SALES PRICE (PER SQUARE FOOT)

AIRPORT 3 10.41 $5,010,000 $11.05

Commercial 1 3.55 $2,075,000 $13.42Industrial - 0.00 $0 n/aResidential 2 6.86 $2,935,000 $9.82

APEX 2 753.47 $4,197,020 $0.13

Commercial - 0.00 $0 n/aIndustrial 2 753.47 $4,197,020 $0.13Residential - 0.00 $0 n/a

DOWNTOWN 3 19.88 $2,965,000 $3.42

Commercial 1 1.72 $625,000 $8.34Industrial - 0.00 $0 n/aResidential 2 18.16 $2,340,000 $2.96

EAST LAS VEGAS 1 13.83 $2,690,000 $4.47

Commercial - 0.00 $0 n/aIndustrial - 0.00 $0 n/aResidential 1 13.83 $2,690,000 $4.47

HENDERSON 13 105.19 $29,130,393 $6.36

Commercial 3 12.94 $4,420,000 $7.84Industrial 1 1.55 $675,000 $10.00Residential 9 90.70 $24,035,393 $6.08

NORTH LAS VEGAS 14 65.34 $15,693,448 $5.51

Commercial 6 23.12 $6,569,860 $6.52Industrial 3 34.59 $6,133,188 $4.07Residential 5 7.63 $2,990,400 $9.00

NORTHEAST 3 5.05 $380,000 $1.73

Commercial - 0.00 $0 n/aIndustrial 1 2.39 $190,000 $1.83Residential 2 2.66 $190,000 $1.64

NORTHWEST 10 66.36 $25,780,750 $8.92


RESORT CORRIDOR - 0.00 $0 N/A

Commercial - 0.00 $0 n/aIndustrial - 0.00 $0 n/aResidential - 0.00 $0 n/a

SOUTHWEST 33 134.37 $62,270,854 $10.64

Commercial 6 17.67 $14,253,557 $18.52Industrial 1 1.82 $600,000 $7.57Residential 26 114.88 $47,417,297 $9.48

SUMMERLIN 3 44.17 $21,725,000 $11.29


WEST LAS VEGAS 2 5.95 $1,855,000 $7.16

Commercial - 0.00 $0 n/aIndustrial - 0.00 $0 n/aResidential 2 5.95 $1,855,000 $7.16

SUBTYPE TOTALS

Commercial Total 22 113.82 $50,934,167 $10.27Industrial Total 8 793.82 $11,795,208 $0.34Residential Total 57 316.38 $108,968,090 $7.91

MARKET TOTAL 87 1,224.02 $171,697,465 $3.22


Q1-16 87 1,224.02 $171,697,465 $3.22

Q4-15 97 610.53 $220,091,246 $8.28

Q3-15 92 467.84 $143,792,608 $7.06Q2-15 61 324.47 $91,474,040 $6.47Q1-15 92 899.06 $170,589,500 $4.36Q4-14 85 787.14 $139,172,418 $4.06Q3-14 87 560.97 $122,694,458 $5.02Q2-14 147 672.00 $287,663,536 $9.83


Copyright © 2016 Colliers International.

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

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COLLIERS INTERNATIONAL | LAS VEGAS3960 Howard Hughes ParkwaySuite 150Las Vegas, Nevada 89169 | USA+1 702 735 5700www.colliers.com/lasvegas

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