Rising Demand Pushes Rents Higher in Las Vegas

Las Vegas’ recovery features above-average job and population growth. That has produced a modest but steady improvement in housing demand, as the market aims for long-term stability.
Las Vegas rent evolution, click to enlarge

Las Vegas rent evolution, click to enlarge

Las Vegas’ recovery features above-average job and population growth. That has produced a modest but steady improvement in housing demand, as the market aims for long-term stability.

Employment gains were led by the mining, logging and construction segment, which kept its position as the state’s fastest-growing sector during the past year, due to a spate of ongoing projects. MGM is working on a $130 million expansion of the Grand Conference Center, while a 65,000-seat stadium is in the planning stages. Station Casinos will add a gaming and entertainment facility in Reno, and Eldorado Resorts will upgrade its Eldorado, Silver Legacy and Circus Circus properties in the area. The office market is recovering, with demand and rents on the upswing. Credit One Bank’s new 152,000-square-foot headquarters is slated for delivery by the end of the year.

Las Vegas’ apartment sector has heated up during the past few years, with rents rising 4.4% year-over-year and occupancy in stabilized properties reaching 95.6%. Development activity is increasing and property values are rising, contracting acquisition yields. Deliveries have been weak, but the pipeline looks promising with 5,200 units under construction, more than half of which are slated for completion by the end of the year. Considering the strong level of demand, we expect rent growth to top out at 4.5 percent in 2017.

Read the full Yardi Matrix report.