Las Vegas Retail Market Report
Q4 2025 Analysis: Resilience in the face of economic headwinds. A deep dive into vacancy compression, the bifurcation of asset classes, and the rising cost of delivery.
Executive Summary
The Las Vegas retail sector closed 2025 with sustained momentum. Despite a 25 basis point increase in interest rates in Q3, consumer spending in the valley remains robust, driven by a 4.1% YoY increase in tourism and steady population growth in the Southwest and Henderson submarkets. The story of Q4 is one of "Flight to Quality," with Class A assets commanding historic premiums while Class C inventory faces absorption challenges.
Market Fundamentals
Visualizing the correlation between limited supply and asking rent growth.
Rent Growth vs. Vacancy Trend (2023-2025)
Analyst Note
The inverse relationship between vacancy and rent remains the dominant theme. Since Q1 2024, we have observed a 12% aggregate increase in asking rents while vacancy has compressed to historical lows.
Submarket Spotlight: The Southwest submarket (Durango Corridor) continues to outperform, with vacancy virtually non-existent at 1.8%.
Key Drivers
- ✓ Constrained land supply for new development.
- ✓ High construction costs limiting speculative builds.
- ✓ Migration of CA wealth supporting high-end F&B.
Asset Class Deep Dive
Not all retail is created equal. The market is bifurcating, with "Experiential" Class A product commanding significant premiums while Class C faces functional obsolescence. Select a class below to explore the data.
Class A Analysis
Class A product, defined by modern architecture, lifestyle components, and credit-tenant anchors, is the clear winner in Q4 2025. Landlords are pushing rents aggressively, with some prime end-caps in Summerlin and Henderson West trading above $75 PSF. Tenant Improvement (TI) allowances remain tight as demand outstrips supply.
Key Trends:
- • Zero-tolerance for vacancy; waiting lists common for prime pads.
- • "Eat-tail" (Dining + Retail) driving 60% of new leasing.
- • Construction costs of $450+ PSF limiting new supply.
Absorption vs. Availability
Source: VAC Development Internal Research, Q4 2025
Construction & Development Costs
The "Hard Cost" Hurdle
While inflation has cooled globally, construction inputs in Southern Nevada remain elevated due to skilled labor shortages and material transport costs. This creates a high barrier to entry, effectively insulating existing landlords from new competition.
Transaction Monitor
Notable Q4 2025 activity. Switch views to compare Lease vs. Sales data.
| Tenant | Property Name | Submarket | SF Leased | Rent (PSF/YR) | Lease Type |
|---|---|---|---|---|---|
| Sephora | The Bend @ Sunset | Southwest | 4,500 | $52.00 | NNN |
| Cava Mezze Grill | UnCommons Phase II | Southwest | 2,800 | $68.00 | NNN |
| Planet Fitness | Henderson Plaza | Henderson | 22,000 | $19.50 | NNN |
| Local Coffee Co. | Downtown Arts Dist. | Central | 1,200 | $32.00 | MG |
| Grocery Outlet | Craig Rd Center | North LV | 18,500 | $16.50 | NNN |