The retail sector in Las Vegas is currently experiencing a complex blend of resilience and difficulties. Despite a few high-profile closures among major retailers, the retail vacancy rate in Clark County remains relatively low.
With strong demand for retail space, insights from John Stater, Colliers’ research manager, indicate that Clark County’s taxable retail sales reached $30.3 billion in the last 12 months. This figure marks a slight decline of 1.2 percent in annual growth.
Particularly affected are the eating and drinking establishments, which reported taxable sales of $12.6 billion and a decrease of 3.7 percent annually. Employment trends reveal that Southern Nevada lost approximately 1,100 retail jobs, including declines of 300 jobs in health and personal care stores and 100 in food and beverage outlets. While the overall job market for eating and drinking places contracted by 100, full-service restaurants managed to add 200 jobs during this timeframe.
Even amidst these challenges, Southern Nevada’s retail market has shown resilience, with the vacancy rate slightly increasing to 4.4 percent as 2025 progressed. According to Stater, retail remains the most robust commercial real estate sector this year despite facing significant hurdles.
The first quarter saw notable negative net absorption, primarily due to the closure of various big box stores both locally and nationwide, reversing much of the gains achieved in 2024. However, subsequent quarters reported a positive net absorption of 215,018 square feet, shifting the year-to-date figures into positive territory.
Stater remarked, “While year-to-date net absorption was positive for the market, employment and taxable sales growth was negative, suggesting challenges ahead for Southern Nevada’s retail market.”
The retail landscape in Las Vegas is evolving as operators adapt to the demands of a changing economy. Joshua Strauss, president of retail and entertainment at Dreamscape Cos., emphasized that many retailers are downsizing their store footprints. They are reevaluating how much space is needed for merchandise when customers can conveniently shop from their phones.
Strauss noted that modern retailing has shifted toward a showroom model rather than simply providing merchandise for purchase. He stated, “Tenants are losing their shirts because it’s too much of a liability to have all that space. We are consistently seeing consolidation.”
The focus is now on creating unique experiences that enrich customer interactions beyond merely selling products. Strauss explained, “It’s not about retail stores putting up garments. You have to carry a lifestyle and make people feel welcome and engaged.” This trend is increasingly evident in the design and atmosphere of retail spaces.
Building owners are also adapting by repurposing existing areas for entertainment and experiential uses when traditional retailers exit. Strauss praised projects like Area 15, an interactive entertainment complex, as evidence that innovative spaces can attract significant foot traffic. He stated, “Area 15 is the most impressive project I have seen in Vegas in years, and years and it shows if you build it they will come.”
While demand for retail space remains robust, the construction of new facilities presents challenges. High land costs, coupled with a strict regulatory process, create obstacles. Despite these issues, retail demand persists, particularly for essential goods, even with increasing competition from e-commerce giants like Amazon.
Brian Sorrentino, director of ROI Commercial, highlighted that Las Vegas boasts historically low vacancy rates, defying expectations around the retail sector’s viability. He pointed out that the ongoing demand for retail space reflects a backlog due to insufficient construction activity, meaning existing spaces must be repurposed.
Sorrentino observed, “You have to repurpose because you can’t afford to buy land and build retail space anymore because the rent is so high that retailers can’t make any money.” He emphasized that while the retail landscape is evolving due to online shopping, the restaurant sector remains strong due to the inherent experience it offers.
Stater also indicated that the third quarter saw the completion of 169,083 square feet of retail space, primarily attributed to a new Costco in the southwest submarket. In the coming year, a total of 305,985 square feet of retail space is projected to be completed, with over 63 percent already pre-leased.
This quarter’s retail net absorption stood at 87,772 square feet, which is lower than both the preceding quarter and the same quarter the previous year. Community centers reported the highest net absorption at 251,930 square feet, while free-standing retail spaces saw a gain of 174 square feet. Conversely, strip centers faced a downturn, with a significant negative net absorption of 117,591 square feet.
Looking at the different submarkets, the southwest area marked the strongest net absorption at 182,844 square feet, followed by downtown with 45,023 square feet and University East at 34,938 square feet. Negative absorption figures were recorded in Henderson, North Las Vegas, and the west central submarkets.
Stater noted that numerous sectors showed activity, most prominently in miscellaneous retail (22.4 percent), food (14.9 percent), and apparel (13.1 percent), with personal services and amusement offerings also making contributions. Local businesses accounted for a significant 61.1 percent of the leased square footage tracked over the past year, overshadowing national operators.
Leases over the past 12 months depicted an average rent increase of 3.1 percent per annum, marking a slight elevation compared to earlier periods. The average tenant improvement allowance decreased to $17.62 per square foot, indicating cautious investment in the retail sector.
Submarket analysis reveals that North Las Vegas, the northeast, northwest, and southwest areas enjoy vacancy rates lower than the valley average, while downtown, Henderson, and University East present higher average vacancies. The lowest vacancy rate was logged in the southwest at 2.9 percent, contrasting with downtown’s 7.1 percent.
As the market adjusts, the average asking rent for retail space has climbed to $1.88 per square foot, a rise of $0.17 from the previous year. The Henderson submarket commanded the highest asking rates at $2.87 per square foot, followed closely by the southwest area at $2.75 per square foot.
In summary, while Las Vegas retail continues to thrive, underlying challenges regarding job loss, sales decline, and evolving consumer preferences pose ongoing threats. The ability of the market to adapt to these changes will determine its future stability.
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