L A S VEG A S RESE ARCH
Follow the
bouncing rent. The onslaught of economic changes in 2020 have left property owners a bit confused – or at least the movement of asking rents suggests that this is the case. With new and often contradictory information appearing every day (or hour), what is an owner to do? Just how much rent should they be asking – or how much is their building worth?
Since I’m a researcher, and therefore a
Industrial owners primarily took their asking
pseudo-academic, I’m not actually going to
rents off the table – ah, the allure of mystery. This
answer that question. Hey – if I don’t give
was the primary action taken by landlords during
you a straight answer, I can never be wrong,
the Great Recession. Approximately an equal
right? But in this article, I am going to talk a
number of industrial units had their rents raised
bit about the strange trajectory – or perhaps
as lowered. Office landlords were more sanguine,
lack of trajectory – we are seeing in 2020 in
with more units getting an asking rent increase.
rents, and show a bit of data that might point
Retail landlords behaved more like their industrial
people in the right direction.
counterparts. The more important piece of information is not shown on the table though –
When the business closures hit in March of this
roughly 93% of units saw no change at all. There is
year, landlords and property owners did not
wisdom in crowds after all!
OCTOBER 2020
quite know what to do. This was not surprising,
4
as they were lacking significant pieces of data
Property sellers were more realistic in my opinion.
upon which to make a sound decision, such as
Although roughly 83 percent of properties saw no
how long the closures would last, how badly
change in their asking price, of those that did, the
would tenants be hurt, etc. With no solid data,
majority saw that asking price decreased.
the reaction was confused, to say the least.
John Matt Stater Research & GIS Manager, SW Las Vegas - john.stater@colliers.com
