LAS VEGAS (KTNV) — It’s getting more expensive to run a business in Southern Nevada.
Commercial real estate experts say many small business owners in the valley are dealing with rent increases from 20 to 60 percent.
Streets of New York has been in the Village of Centennial Springs business complex off Durango Drive and Farm Road for 15 years, but the path for a future in the complex has been made more difficult by a 30 percent rent increase.
“It’s unfathomable," said Stacy McBride, co-owner of Streets of New York. “I don’t know where I’m going to eat it or how I’m going to eat it, but it’s on my shoulders.”
McBride says their loyal customer base kept their restaurant open during the pandemic, and it’s the same reason she’s fighting to stay at their location.
“If we had to move somewhere, it would be devastating because this community has become our family,” she said.
Across the street, Derrick Taylor, the owner of "Shall we Play? Games and More Store" is nervous he could see a rent increase from the same landlord.
"If they did a 30 percent increase on us, we’d have to move," Taylor said. "No 'if's, 'and's or 'but's about it. It’s not feasible to make that up."
Chris Clifford owns the Village of Centennial Springs business complex. He says he purchased the building during the recession, and it came with a lot of necessary, hidden fixes.
"We we've been sitting there for basically the last eight years fixing everything,” Clifford said.
Clifford says his costs of operating are rising as well.
"Every time you turn around, insurance is going up, water is going up, electricity is going up, taxes are going up,” Clifford said.
Commercial real estate agent, Mervat Berry, says this is just the start.
"I have seen a huge demand for retail space from both new businesses and businesses that are looking to expand,” Berry said.
Berry says the landlord doesn’t determine where the market is, the supply and demand does.
She added new developments with higher rent will increase the neighboring business’s rent. Areas dealing with the largest commercial rent price increases are in the southwest, specifically near 215 and Durango, Summerlin and Henderson.
More price hikes could be on the way, because Las Vegas is an attractive place to do business with tax advantages and pro sports.
“The A's, Golden Knights, Raiders, talks of NBA, the Brightline station, F1 races- all of those have to do with what's driving demand to Las Vegas," Berry said.
Berry says business owners should consult with an expert a year before their retail lease is up so you know what kind of price to expect.
“This way you can determine whether your rent is close to market rent or whether there's a huge gap to fill there and have them help you negotiate that rent rate with the landlord. They are going to have a much better understanding of where the rental rates should be and where you can save money, because if there is no turnover to the space, there's no tenant improvement allowance,” she said.
