"The latest figures demonstrate the relaitve health of theretail real estate sector as substantial pent-up demand during thepast two years was fulfilled," says Applied Analysis principalBrian Gordon. "A lack of new inventory prior to this quarter waspartially driven by an overheated residential market that had landowners seeking high-density residential builders rather thancommercial space developers. A more balanced land distribution islikely to prevail in the coming quarters."

The market wide average vacancy rate was held down byunincorporated Clark County, where average vacancy is 1.8%, andNorth Las Vegas, where vacancy stands at 2.1%. Net absorption inthose two markets totaled approximately 1.6 million sf during thequarter. Pulling the average up were the City of Las Vegas and theCity of Henderson, where average vacancy in the first quarter was3% and 3.2%, respectively. Net absorption in those two marketstotaled slightly more than 200,000 sf.

While the average retail vacancy rate has remained steady theaverage asking rate has not. In the past year, the average askingrate has gone from $1.75 per sf to $2.08, an increase of 19%.Breaking it down by submarket, the most significant increase inrents occurred in the City of Henderson. Rents there have risen 57%since this time last year and now stand at $2.42. The highestaverage asking rent, $2.66 per sf, is in North Las Vegas, where oneyear ago the asking rent was $2.50. The lowest average asking rent,$1.70 per sf, was in the City of Las Vegas, up from $1.64 one yearago.