Another new office building is in the works for Downtown Summerlin signaling the Las Vegas Valley’s real estate market will remain relatively strong in 2024 despite high interest rates, local experts said Thursday.
“I think the Vegas valley, Summerlin specifically, places like that, places like Culver City, California, there’s still a much higher demand and supply in those markets for quality office (offerings),” Frank Stephan, president of the Howard Hughes Holdings’ Nevada region said during a panel discussion hosted by the Southern Nevada chapter of NAIOP, a commercial real estate association, at the Orleans.
While declining to give further details, he said the class A office building will be developed near the recently opened 10-story 1700 Pavilion building in Downtown Summerlin. Stephan said Howard Hughes expects to have announcements on roughly half a dozen unspecified projects by early 2025.
Experts said the strongest demand in the valley’s real estate market is for the development of new industrial and mixed-use space, which often combines retail, apartments and offices in one project. They said after a tumultuous 2023, with its rising interest rates that tamped down new development, the market should begin to normalize in 2024 as lower rates are expected.
Christopher Waller, a member of the U.S. Federal Reserve’s Board of Governors, on Tuesday said the fight to get inflation to 2 percent is on the right path and interest rate cuts are likely in 2024.
Prologis, one of the largest industrial developers in Las Vegas, could open four new buildings this year, said Mathias Hughes, vice president and investment officer for the San Francisco-based developer.
The developer also is in the early stages of developing 879 acres it bought last year at Apex Industrial Park. Hughes said construction could start in roughly three years.
“I think this market has got tremendous fundamentals, despite the rising interest rate environment, to look at deals that offer synergy with our portfolio that are locations where our customers want to be,” Hughes said.
Matthew Nelson, vice president of J.A. Kennedy Real Estate Company, said retail could be the sector to struggle in 2024.
“I think retail is going to struggle, it’s going to be build-to-suit stuff, it’s going to be single-tenant stuff,” he said. “It’s going to be nothing speculative in any way, shape, or form.”