E
arthquakes leave a lasting mark, yet COVID reshaped the commercial real estate landscape in ways that continue to ripple through today’s market. The pandemic forced firms to rethink operations, prompting a surge in e‑commerce, a reevaluation of business models, and a shift toward remote or hybrid work. As a result, office space demand fluctuated dramatically, and the sector entered a new phase of adaptation.
**Post‑pandemic rebound in Nevada**
By 2025 Nevada’s office market had steadied. In northern Nevada, the rapid recovery was fueled by an influx of Californians who brought small businesses or chose to lease modest offices rather than work exclusively from home. The market’s vacancy rate hovered around ten percent, a figure that has stabilized after a period of volatility. Investors who once drove prices to unsustainable levels have now cooled, and the market is no longer in a frenzy of speculation.
Southern Nevada has seen a pivot toward ownership. SBA incentives and the high cost of tenant improvements have made buying more attractive than leasing. Demand remains strong, inventory scarce, and prices have climbed. Developers have pulled many planned projects from the pipeline, citing low vacancy and the continued prevalence of remote and hybrid work. The result is a slow, steady growth trajectory rather than explosive expansion.
**Shadow space and state office moves**
The pandemic created “shadow space”—leased offices that remained unused because employees stayed home. Vacancy calculations rose to over twenty percent when accounting for this phenomenon. To counteract the excess supply, Governor Lombardo’s administration began leasing non‑state‑owned buildings for government use, occupying more than 150,000 square feet since the 2023 session. The state’s presence has helped tighten vacancy rates and has positioned Nevada as a key tenant in the market.
**Emerging office trends**
1. **Spec suites** – Owners who pre‑build move‑in ready spaces between 1,200 and 3,500 square feet have seen high occupancy. These suites combine private offices, open areas, and high‑end finishes without excessive cost, striking a balance that attracts tenants.
2. **Repositioning large units** – Converting a 20,000‑square‑foot building into four 5,000‑square‑foot units appeals to small businesses and short‑term users. This strategy maximizes flexibility and reduces vacancy risk.
3. **Coworking** – New coworking developments in Southern Nevada cater to startups and firms seeking flexible, short‑term leases. They bridge the gap between fully furnished offices and permanent spaces.
4. **Office condos** – Investors purchase vacant buildings, convert them into common‑area and owner‑occupied suites, and sell them at a premium. The model is especially attractive in desirable locations where tenant improvement costs are high.
5. **Pseudo‑medical spaces** – A growing trend involves aesthetic and medical practices (injectables, Botox, light therapy, etc.) moving into office buildings as retail rates rise. These shops often expand from solo practitioners to groups of 30–40 providers.
**What tenants want**
Quality remains paramount. With limited new construction, companies gravitate toward existing buildings that offer superior amenities and convenient locations. Desired features include:
- Cycling infrastructure, parking, and commuting programs
- Dog‑friendly policies, on‑site gyms, and diverse food options
- Proximity to hospitals for medical offices, courthouses for law firms, and other industry hubs
Remote work has altered traditional location preferences. Firms no longer need to cluster near courthouses or hospitals; virtual hearings and meetings reduce the necessity of physical proximity. Instead, companies favor areas with high density, easy freeway access, and nearby amenities—Summerlin, Henderson, and the 215 Beltway corridor are prime examples.
**Hybrid work and space efficiency**
The shift to hybrid schedules has driven a “hotel model” of office use. Companies that once required 5,000 square feet now lease only 3,000, as employees occupy the space two or three days a week. This model reduces square‑footage footprints while maintaining workforce capacity, benefiting both tenants and landlords.
Las Vegas experienced a milder pandemic impact, with fewer drastic office reductions. Hybrid work has become the norm, and the market remains stable. New office developments are limited, but speculative projects near the 215 Beltway and in the Southwest corridor are under consideration, contingent on pre‑leasing activity.
**Market outlook and challenges**
The prevailing sentiment is one of stability, with vacancy rates around ten percent and occupancy near 99 percent. However, construction costs—materials, shipping, labor—remain high, stalling new office projects. Investors and lenders exhibit caution, especially when national CRE reports suggest a downturn that may not reflect Nevada’s resilience.
Despite this hesitancy, the market’s fundamentals—low delinquencies, strong tenant demand, and a robust state presence—indicate healthy performance. The next 12–24 months will test whether the current equilibrium endures or if a new wave of development emerges as costs normalize.
In summary, COVID catalyzed a profound transformation in Nevada’s office sector: a rebound in northern markets, a shift toward ownership in the south, the rise of spec suites and office condos, and a persistent emphasis on quality amenities and flexible work models. While growth remains modest, the market’s stability and adaptability position it well for the evolving demands of modern businesses.
