The retail market here expanded by 1 million sf in the firstquarter, while market demanded (or absorbed) 371,000 sf of space.In addition, recent market conditions, including the performance inthe residential sector, prompted the closing of various regionaland national outlets throughout the valley, including CompUSA,Levitz Furniture and Rite-Aid stores. Additional closures arelikely for retail centers that are currently occupied by WickesFurniture, which is in the process of winding down theiroperations, according to the report.

"It is clear that retailers, particularly those tied to theresidential market, have been impacted by the latest slowdown inthe overall economy," Aguero says. "Not only do taxable salesactivity reports confirm the current performance, but recent retailoutlet closures are a clear signal of instability. Consumerspending levels are coming off unsustainable highs, propped up byhome equity extractions and record-low home interest rates. Retailinventory growth was tracking this trend, and the combination ofhigh residential vacancies and reduced consumer spending is anunfavorable condition for retailers and retailer spacedevelopers."

Retailers have been quick to react, Aguero says, and will bemuch more cautious with expansion plans in the near-term, awaitingsigns of improvement in the core fundamentals. "High levels ofpre-leasing and quality-credit tenants will be required at manyplanned retail sites before lenders are willing to fundconstruction in emerging areas within the Las Vegas valley," hesays.