How Much Does Office Space Cost in Las Vegas?
Are you considering leasing commercial office space in Las Vegas or Henderson? This guide to leasing office space will give you the information you’ll need to make informed decisions before you sign an agreement.
Determining How Much to Spend on Office Space
How much you should spend on your office space depends on three factors: your level of income, your industry, and your immediate financial situation. While it goes without saying that the more you make, the more you can afford, many business owners believe you should always get the best deal you can find regardless of your income. Depending on your industry, you should expect to pay anywhere from two to 13 percent of your income on your office space.
Plan ahead for growth when acquiring an office, as in most cases you will be signing a lease term for three to five years. You will want a location that will allow you the room to grow. One of the most expensive errors we see is that business owners do not take into account their needs a couple of years down the line for growth. Moving your business will not only impact your out-of-pocket business expenses but is also disruptive to your operations and clients.
Average Cost of Office Space in Las Vegas Valley
The type of lease you choose will define which additional expenses you are responsible for, so it’s important to understand exactly what the differences are. Another thing you’ll need to understand is the difference between asking rent and effective, or gross, rent. Asking rent is simply the effective rent, without any discounts the landlord offers.
The following prices for properties under each type of lease are from August 12, 2019.
Full Service Leases
If you are looking for an office space where the landlord will be responsible for all operating expenses, the full-service lease is for you. With this type of lease, you can expect the building’s owner to pay for:
- Janitorial service
- Property taxes
- Property insurance
The average rent for office in Las Vegas for a full-service lease is $1.99 per sq. ft. per month, or $23.16 annually. The average free rent discount in this city is 2.3 months on a 2,518 sq. ft. space, translating to an effective rent of $1.93 per sq. ft., or $19.20 annually. Despite the significant yearly discounts available, the average lease term in Vegas is just 3.6 months. The average month to market time is six months.
If you are in a financial position to secure a longer lease, it’ll allow you to hold onto more of your profits.
Modified Gross Leases
If you want lower base rent when you sign your lease, consider a modified gross lease. This type of lease is a happy medium for those who are willing to take on some of the operating expenses in exchange for a lower rate. With a modified gross lease, you may pay for maintenance, insurance, taxes, or utilities.
While the landlord will cover the other expenses, they may make up for their share of the costs through a “load factor” increase in the rent. Make sure you’re really getting a discount before you sign a modified gross lease.
In Las Vegas, the average asking rent for an office modified gross lease is $1.54 per sq. ft. per month, or $18.48 annually. The average effective rent is $1.39 per sq. ft. per month, or $16.68 annually. The average free rent you can expect to get with this kind of lease in Vegas is 1.9 months, with an average 2,413 sq. ft. of space. The average lease term is 2.8 months.
The average month to market time for a modified gross lease in Vegas is 8.1 months, so it may take you longer to get into your space with this type of lease.
Triple Net (NNN)
A triple net lease, or NNN, is the right choice for you if you’re interested in a space that has the lowest possible rent and you are prepared to assume responsibility for most of the additional expenses.
In Las Vegas, the average asking rent for an office triple net lease is $1.69 per sq. ft. per month, or $20.28 annually. The average effective rent is $1.58 per sq. ft. per month, or $18.96 annually. The average free rent for this kind of lease is 1.7 months, with an average 3,163 sq. ft. property. The average lease term is 3.1 months.
The average month to market time for a triple net lease is 10.2 months. It’ll take you longer to get in, but the discounts up-front can be so significant that it’s worth the wait.
Average Cost of Office Space in Henderson
If you want to lease office space in Henderson, expect to pay more than you would in Las Vegas in exchange for lower crime rates and a higher standard of living.
The average prices for properties under the following leases are from January 1, 2019, through June 30, 2019.
Full Service Leases
The average asking rent for a full-service lease in Henderson is $2.02 per sq. ft. per month, or $24.24 per year. The average effective rent is $1.84 per sq. ft. per month, or $22.08 per year. In Henderson, the average free rent you can expect with your office space is 2.8 months on an average 3,123 sq. ft. property. The average lease term in Henderson is 3.3 months.
The average month to market time for a full-service lease in Henderson is 6.7 months, so just slightly longer than Las Vegas.
Modified Gross Leases
The average cost of a modified gross lease in Henderson is $1.77 per sq. ft. per month, or $21.24 annually. The average effective rent is $1.39 per sq. ft. per month, or $16.68 annually. You can expect an average of 1.7 months of free rent per year, with each lease averaging 2,945 square feet. The average lease term for this kind of lease in Henderson is much longer than it is in Vegas at 23.1 months. The average month to market time is 9.1 months.
Triple Net (NNN)
The average triple net lease in Henderson has an asking rent of $1.84 per sq. ft. per month, or $22.08 annually. The average effective rent is $1.74 per sq. ft. per month, or $20.88 annually, with an average free rent period of 1.7 months. The average lease term is 3.3 months, for an average 3,139 square foot property. The average month to market time is 9.8 months.
There are many decisions involved in choosing the right property and lease terms for your needs. A professional can guide you through this process to make sure you are off to the best possible start. When you’re ready to lease or purchase a commercial property, contact the experts at Graham Team Commercial Real Estate.