On Friday January 20, 2017, NAIOP Southern Nevada held its fourth annual forecast event at the Orleans. Forecast 2017: Looking for a Sign was presented by Lied Institute for Real Estate Studies, Lee Business School, UNLV in cooperation with NAIOP Southern Nevada. This year’s event had a star-studded line-up of keynote speakers and panelists that included:
Renowned real estate economist, Dr. Mark G. Dotzour spoke about the national economic outlook for commercial real estate and Thomas J. Bisacquino, President and CEO of NAIOP discussed the national scene and the organization.
Commercial market panel:
Retail – Brendan Keating – Logic Commercial Real Estate
Office – Michael Dunn, CCIM, SIOR – Cushman & Wakefield Commerce
Industrial – Garrett Toft, SIOR – CBRE
Land – Curt Allsop – Newmark Grubb Knight Frank
Disposition/Acquisition – Dr. Mark G. Dotzour
Moderator – John Restrepo, RCG Economics LLC
This year’s topic focused on the current state of Southern Nevada’s commercial markets as well as developments on the national scene and in Washington that could impact the industry. The consensus was one of optimism regarding interest rates, where we are in the market cycle, supply-demand factors, economic growth and possible revisions to the federal tax structure and regulatory environment that could help the industry, nationally and locally, to continue growing.
Other highlights from the crystal ball included:
1. A shift from CBD to Suburban markets with millennial migration to the suburbs, but smaller PSF needs for office workers with shared spaces and working from home
2. E-commerce creating industrial/warehousing opportunities and opportunities in the “last mile” distribution
3. E-commerce creating the need for retail to re-purpose and re-tenant centers away from big box users to entertainment, food and destination tenants to capture shoppers
4. Industrial is not showing any signs of downturn with low interest rates and demand for space
5. A moderation in residential activity but a need for B and C (affordable) apartments. Increasing land costs and increasing construction costs are making affordable housing deals harder to pencil.
6. The big unknown in the picture will be the political uncertainty and new policies and actions that will (may) come out of Washington.
7. Early signs indicate challenges in tax reform, potential trade wars and federal rate increases
8. Potential opportunities can be seen in infrastructure spending and regulatory rollbacks
9. Another key area to monitor may be energy legislation and easing of drilling regulations
Las Vegas has continued to rebound from the great recession in all the indicators of tourism and employment but lags in overall construction growth. With 2016 seen as the 7th/8th year of growth, it may be reaching a plateau into 2018.
All in all, a very positive view from both national and local experts.