By JEFFERY MEEHAN
LAS VEGAS BUSINESS PRESS
Residential and some sectors of the nonresidential construction markets have been heating up over the past several quarters in the Las Vegas Valley, leading to a greater need for qualified workers. But some local firms and homebuilders are reporting a dry spell in available workers needed to fill some of the new positions.
“Not only is it difficult to get people to send in resumes, it’s even more difficult to find qualified people,” said Nathan Schweigart, president of Las Vegas-based NDL Group Inc., a general contracting and consulting firm. “About 90 percent of the resumes NDL receives, the workers aren’t qualified for some of the positions.”
One of the reasons for the plunge in available workers has been the length of the time that has passed since the boom years. Schweigart said anybody who was qualified to do high-skilled work moved out after things got tough in Las Vegas.
“Your superintendent that could do site building and out-of-the-ground building — those guys can get jobs anywhere, so they left with their family,” he said.
At the valley’s height, the number of construction workers employed sat at about 110,000, said Stephen Miller, director of the University of Nevada, Las Vegas Center for Business and Economic Research.
Miller said we are at about 60,000 construction workers in the valley today. Comparably, that number has risen from a low of 34,800 workers in early 2012, according to data from Colliers International Las Vegas.
Commercial construction and homebuilding on rise
Some of the boost in construction employment has been from the rise in commercial projects, which NDL focuses on, around the valley.
“I have a year-and-a-half worth of backlog,” Schweigart said. “Turning the year with almost your whole next year filled with work, that’s something that hasn’t happened in eight to 10 years.”
Increases have predominately come from the industrial sector in the past several years. Completed construction projects in the industrial sector sat at more than 1.1 million square feet in 2014, which included build-to-suit and spec development, according to Colliers International Las Vegas.
That completion rate nearly doubled in 2015. And 2.4 million square feet of industrial space was completed in the first three quarters of 2016, with much of it speculative space, according to Colliers International Las Vegas’ third quarter industrial report.
Construction expected to continue
“All the market indicators point to an industrial market that will continue to prosper in 2017,” said John Restrepo, principal at RCG Economics. “While we had concerns about a tightening market that could lead to space shortages, rising rents and land prices, the market has responded with 4.8 million square feet currently under construction and 7.4 million square feet currently in the planning stages for 2017 and beyond.”
Miller agreed there was a shortage in the industrial sector, with its low vacancy rate. As of the third quarter, vacancy in the industrial sector sat at 5.2 percent, Colliers International Las Vegas data showed.
Compared to industrial, the office and retail sectors have been less active. The vacancy rate for office was 17.1 percent in the third quarter, according to Colliers. This was an improvement over the third quarter of 2015, when vacancy was at 18.2 percent.
The retail market had a vacancy rate of 8.6 percent in the third quarter, also a drop of about 1 percent over the same time in 2015, Colliers data show.
One of the largest projects in the retail sector was the more than 350,000-square-foot Ikea project in the southwest.
There are some larger office projects in the pipeline. Just up the road in Summerlin, Howard Hughes Corp. announced plans to raise a 152,000-square-foot-plus, six-story office building in Downtown Summerlin. Other build-to-suit office projects were announced in 2016, including Credit One Bank’s 152,000-square-foot office building in the southwest and the Greater Las Vegas Association of Realtor’s planned 40,000-square-foot headquarters near S. Rainbow Boulevard and the 215 Beltway.