New $60 million South Pointe Plaza underway

September 29, 2003 - "The trend towards owner occupied offices is becoming very popular," says Jeremy Aguero, a principle with Applied Analysis, a Las Vegas-based economic research firm. "Many people who took money out of the stock market needed new investments, and with mortgage rates so low, owner-owned offices were an attractive alternative."

However, southeast office vacancy rates averaged 19.7 percent for the first sixth months of 2002, nearly 6.4 percent higher than the valley-wide average. Yet the southeast office submarket is still averaging lease rates of $2.09 per square foot - the valley's highest. The disparity can be attributed to a number of things, including owner concessions to keep base rent values high.

We've seen increased owner concessions, like offering two months free rent or inflated tenant improvement allowances, in order to base lease rates up," Aguero says. "The market is much softer than it was a year or two ago."

Despite this, South Pointe Plaza's location and mix of retail, office and restaurant offerings ensure a higher chance of success. Located along a major transportation corridor, the project is near St. Rose Hospital and Del Webb's Anthem, a 5,000-acre, 13,700-home master-planned community. Also, 3,000 acres of federally held land in Henderson will be auctioned off on November 6, which could result in another nearby master-planned community. And being closer to home is a growing trend for modern office users.

"People like to work and shop close to where they live," says Aguero. "Although there is a lot of product going up in that area, [South Pointe Plaza], generally speaking, has the right mix."

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Article Copyright ©: T. Illia, Las Vegas Business Press