For the past quarter century, Las Vegas has been one of the fastest-growing cities in the nation. (During one remarkable span, 1990–2000, it swelled by 83.3 percent, according to the U.S. Census Bureau.) The increased population spurred suburban development and demand for retail, commercial, and municipal facilities. After years of winning hands, though, the construction industry has seen the economic cards turn against it, and projects throughout the Las Vegas Valley have been scuttled or postponed.
“The state and local governments simply don’t have the capital to keep many projects moving ahead right now,” says J. Windom Kimsey, design principal of local architecture firm Tate Snyder Kimsey Architects. “A lot of our state’s stimulus dollars went to general-fund items to balance the biannual budget, which left little for anything other than road- or transportation-type projects. New vertical construction is almost nonexistent outside of a smattering of new state public works projects.”
In an attempt to change their luck, local architects are advocating for pencil-ready—instead of shovel-ready—criteria for funding. “For every $100 million of capital funds invested in our state’s building infrastructure, we create jobs for 10,000 Nevadans,” says Randy Lavigne, executive director of AIA Nevada/AIA Las Vegas. “It begins with the pencil phase of projects and ends with a healthy economy. When architects work, the whole design and construction industry works.”
POPULATION/EMPLOYMENT
2008 population: 1,865,746, growing 2% annually; June 2009 unemployment: 12.3%.
OFFICE MARKET
Class A office vacancy: 26.5%; average asking rate: $2.84/s.f, full-service gross.
RESIDENTIAL MARKET
Median home sale price: $140,000, down from 2006 peak of $312,000.
MARKET STRENGTHS
- Large, eager workforce
- Growing wind/solar/geothermal industries
- Great climate and amenities
MARKET CONCERNS
- Ongoing credit constriction
- Housing foreclosures
- Declining job and population growth
FORECAST
“New development is and will be extremely rare in Las Vegas for the next 24 to 36 months,” says Patricia Nooney, managing director of CB Richard Ellis’ Vegas office. When things do pick up, “significant preleasing will be required for any speculative developments, to prove that demand is there.”
