Las Vegas Office Market Analysis: October 2025

II. Macro Market Context: Leasing, Vacancy, and the “Flight to Quality”

To understand the investment sales data, it is imperative to first analyze the underlying leasing and economic environment. The motivations of buyers and sellers are a direct response to the health of the tenant market.

Leasing Activity (The “Demand Signal”)

Leasing velocity in the Las Vegas office market slowed during Q3 2025. The market recorded 433,670 SF of new leasing activity, which represents a 23.2% decline quarter-over-quarter (QOQ) and a 4.1% contraction year-over-year (YOY).⁴ This moderation in new deals does not indicate a market collapse; rather, it signals a strategic shift. Tenants are not focused on broad expansion but are instead “relocating strategically,” a trend that has profound implications for building occupancy.

Vacancy & Absorption (The “Great Divergence”)

The overall market vacancy rate appears stable, with various Q3 2025 reports placing it between 12.5% and 13.7%.2 This top-line number, however, is misleading and obscures the critical underlying trend: a “Great Divergence” between property classes.

Third-quarter 2025 absorption data quantifies this flight to quality²:

• Class A: Recorded +98,110 SF of positive net absorption as tenants moved into higher-quality spaces.
• Class B & C: Recorded negative net absorption, indicating a net loss of tenants.

This data provides a clear narrative: the Las Vegas office market is not one market, but two. The positive absorption in Class A, despite lower overall leasing activity, confirms that tenants are actively fleeing older Class B/C buildings and consolidating into modern, amenity-rich environments. This creates a “have” (Class A landlords) and “have-not” (Class B/C landlords) scenario, which directly explains the dramatic pricing bifurcation observed in the sales market.

Submarket Performance

This divergence is also geographic. The Southwest and West submarkets are the undisputed leaders, boasting the lowest vacancy rates and strongest tenant demand, driven by new “suburban product” and robust amenity offerings.² Conversely, submarkets with “aging inventory,” such as the Central East, are under pressure, with vacancy in that submarket rising to 28.5%.² This macro-regional performance provides a clear hypothesis: the highest sales prices ($/SF) should be concentrated in the Southwest, while the lowest will be found in the Central East.

III. Sales Market Momentum & Volume Analysis (Aug-Oct 2025)

The three-month sales data confirms a healthy, if selective, flow of capital into the Las Vegas office market. The total volume was heavily influenced by large, episodic transactions, while pricing trends were dictated by a “mix-shift” toward higher-quality assets in the latter part of the period.

Table 1: 3-Month Sales Velocity Summary (Aug 2025 – Oct 2025)

Analysis of Momentum

At first glance, sales volume appears to have peaked in September. This, however, is a statistical anomaly. September’s volume was skewed by a single transaction: the $54.1 million, 6-property portfolio purchased by the State of Nevada.1 Similarly, October’s robust volume was dominated by the $48 million sale of the “Narrative” building.1

If these two “whale” transactions are removed, the underlying market shows a more consistent, if lumpy, run-rate. This demonstrates that momentum is not a smooth, rising tide but rather a series of large, strategic “rifle-shot” acquisitions. Capital is not being sprayed across the market; it is being deployed selectively into high-conviction assets. This is further validated by third-party reports, which showed $186.9 million in sales volume for Q3 (Aug/Sept) across 58 transactions, consistent with the data.7

The average price per square foot appears to increase dramatically from August to October. This is not market-wide appreciation. It is a mix-shift. The types of properties sold in September and October (the State portfolio, the “Narrative” Class A building) were of a much higher quality than the smaller, older-asset-dominated transactions seen in August.

IV. Pricing & Valuation Deep Dive: A Bifurcated Market

A blended market average of $337/SF is analytically useless to an investor. The data reveals that pricing is entirely dependent on building class, location, and use-case.

Price Per SF by Class & Location

The sales data from August to October confirms the hypothesis created by the leasing market analysis.

• Class A: Pricing is strong but highly variable based on age and location. The $479/SF achieved by the 3-year-old “Narrative” building (6795 S Agilysys Way) in the premier Southwest submarket sets the high-water mark for new institutional-grade assets. In contrast, 1111 N Town Center, a 30-year-old (though still Class A) corporate campus, sold for $195/SF, demonstrating the discount for an older, unrenovated asset.1
• Class B & C: This is where the bifurcation is most stark, and pricing is entirely dependent on use. Standard, multi-tenant Class B office buildings traded in the $214-$273/SF range. However, when a Class B or C building is acquired by a medical or high-end owner-user, it trades at Class A prices.

• The Premium: 6430 Medical Center Dr, a 21-year-old Class B building, sold for $470/SF to a medical user.1
• The Distress: 2543 S Bruce St, a 42-year-old Class B building in the challenged Central East submarket, sold for just $51/SF.1

Analysis of Cap Rates (Investment-Grade Deals)

The cap rate data from sold properties shows a sophisticated market that is efficiently pricing risk.

• Low Risk (4.9% – 6.0% Cap Rates): Assets with “defensive” characteristics, such as new construction and long-term, triple-net (NNN) leases, are trading at the lowest yields. The sale of 4372 W Ann Rd, a new dental clinic, set the benchmark at a 4.91% cap rate. Similarly, 8605 S Eastern, a stabilized building, sold at a 6.0% cap rate.1
• Medium Risk (6.4% Cap Rate): A standard, multi-tenant suburban office building with a good location but some potential lease-up requirements, 6970 S Cimarron Rd, sold at a 6.47% cap rate.1
• High Risk (9.5% Cap Rate): The sale of 880 Grier Dr at a 9.5% cap rate reflects significant perceived risk. Transaction notes reveal the reason: “The current tenant has only 4 years remaining on the current lease.” The market priced in the substantial risk of re-leasing an 81,000 SF building, demanding a high yield in return.1

V. Liquidity & Time on Market: Gauging Demand Intensity

The Market Time, or Days on Market (DOM), provides a clear gauge of demand intensity and liquidity. The blended average DOM for all sales was approximately 245 days, but this figure is heavily skewed by “zombie listings”—properties that languished on the market for years before finally selling at a deep discount. The median DOM of 184 days (approx. 6 months) is a more accurate measure of the typical sales cycle.

• The “Zombie” Listings: The average DOM is distorted by assets like 4040 E Russell Rd, which finally sold after 1,568 days (over 4 years). Notes confirm this was a “Building in Shell Condition” and a “High Vacancy Property,” which explains the lack of liquidity.1 Similarly, 6010 S Durango Dr took 799 days to sell.1
• “True” Liquidity: For desirable, well-priced assets, the market is liquid. The two Pecos 215 Plaza buildings sold in 133 days. 3275 N Fort Apache was acquired by an owner-user in just 70 days.1

This data demonstrates that liquidity is not a market-wide metric; it is asset-specific. The high DOM on “problem” assets is not an indictment of the market; it’s an indictment of the product. This tells sellers that if an asset is vacant, in shell condition, or functionally obsolete, they must either (a) invest heavily to reposition it or (b) offer a massive price discount to attract an opportunistic buyer.

VI. Key Transaction Analysis (Focus: October 2025)

As requested, the following table details the most notable transactions from October 2025. These five sales serve as perfect case studies for the dominant themes defining the entire market.

Table 2: October 2025 Notable Transactions

1. 6795 S Agilysys Way (“Narrative”): This $48 million sale represents the high-water mark for a Class A institutional asset. At $479/SF, this 3-year-old, 100,000 SF building in the premier Southwest submarket is the “trophy” asset that high-quality investors will compete for.1
2. 7777 Eastgate Rd: This $10.7 million sale shows the power of the owner-user market. Coral Academy of Science, a non-investor, acquired this 41,000 SF Class A campus. This transaction proves the depth of non-investor demand for large, quality buildings.1
3. Pecos 215 Plaza: This portfolio sale of two buildings was a “smart seller” strategy. The seller, Real Capital Corporation, broke up a larger portfolio and sold these two assets to existing tenants. In a soft leasing market, selling to an embedded tenant is a key liquidity strategy.1
4. 6430 Medical Center Dr: This $3.6 million transaction proves the Medical Office (MOB) premium. This 21-year-old Class B building sold for $470/SF—a price on par with a brand-new Class A trophy. This demonstrates the market’s willingness to pay a massive premium for defensive, WFH-resistant medical assets.1
5. 2543 S Bruce St: This $750,000 sale is the low-water mark and the starkest example of the “have-not” market. At $51/SF, this 42-year-old Class B building in the challenged Central East submarket traded at a deep discount, likely near land value. This is the risk of holding an un-amenitized, commodity asset in a weak submarket.1

VII. Geographic Focus: Submarket Performance Analysis

The sales data from the past three months confirms the submarket performance identified in the leasing reports.

• Southwest (SW): This is the epicenter of high-value transactions. The leasing market reports identify it as the top-performing submarket 2, and the sales data validates this. The SW claims the highest-priced institutional sale ($479/SF), the highest-priced MOB sales (e.g., $555/SF for 7189 Advanced Way), and the most robust “Under Contract” pipeline. It is, without question, the market’s “Main Street”.1
• SE Las Vegas / Henderson: This is a mature, stable, and “balanced” submarket. The sales data shows deep, diversified demand, including large corporate owner-users (7777 Eastgate @ $259/SF), high-end smaller owner-users (108 Market St @ $448/SF), and strong medical demand (375 N Stephanie @ $348/SF).1
• South Las Vegas (Airport Area): This area, which led Q3 in leasing activity 5, is a primary target for large-scale capital deployment. The $54.1 million State of Nevada portfolio and the $17.5 million 880 Grier Dr sale confirm its status as a hub for institutional and large private capital.1
• Northwest (NW) / Summerlin: This is a “premium” owner-user market. High-net-worth individuals and professionals will pay an absolute premium to own assets here. The sales data includes the $677/SF sale of 1855 Village Center (to be a private music studio) and the stunning $992/SF sale of the 4372 W Ann Rd dental clinic.1
• Central East Las Vegas: This is the weakest submarket, with 28.5% leasing vacancy.2 The sales data confirms this, showing the lowest and most volatile pricing, from $51/SF to $204/SF. The buildings are the oldest in the market (ages 42, 52, 60, 78).1 This is not an “office” market; it is a market for opportunistic capital, redevelopment, or low-cost owner-users.

VIII. Customary Perspectives: Dominant Market Themes

Two primary “customary perspectives” are essential to understanding the Las Vegas market: the power of the owner-user and the premium for medical office.

1. The “Shadow” Market: Owner-Users vs. Investors

There is a contradiction in the data: leasing reports show a cautious tenant market 4, but the sales data shows aggressive buying across 65 transactions.1 This contradiction is resolved by the owner-user.

In a “flight-to-quality” leasing market, Class A rents are high and rising.2 A successful business (such as a law firm, medical practice, or service company) faces a choice: pay premium rent to a landlord, or buy its own building. The “buy vs. lease” calculation is heavily tilting in favor of “buy.”

The transaction notes from the past three months are dominated by owner-user buyers:

• 7777 Eastgate Rd: Bought by Coral Academy.1
• 115 E Warm Springs Rd: Bought by Leading Edge Scaffold for its HQ.1
• 181 E Warm Springs Rd: Bought by J2 Bio-Pharma.1
• 1855 Village Center Cir: Bought for a private music studio.1
• 6330 W Flamingo Rd: Bought by Neurology Vegas (an existing tenant).1
• 2660 S Jones Blvd: Bought by Pastry Academy.1

This “shadow market” of owner-users is the single most significant driver of demand for buildings under 50,000 SF. These buyers are less sensitive to interest rates than investors and are placing a firm price floor under well-located Class B and C assets.

2. The “Defensive” Asset: Medical Office (MOB) as a Separate Class

It is an analytical error to lump MOBs in with general office. The data shows they trade on entirely different, and superior, fundamentals.

Why would a 17-year-old Class B building (7189 Advanced Way) trade for $555/SF? Why would a 1-year-old new build (4372 W Ann Rd) trade for $992/SF at a sub-5% cap rate?1

These assets are “defensive” for three reasons:

1. They are insulated from work-from-home trends.
2. They are supported by non-cyclical demographic shifts and healthcare spending.
3. They often have long-term leases with high-credit tenants (doctors, hospital systems).

For these reasons, investors—especially 1031 exchange buyers—treat MOBs as a separate and superior asset class. The pricing from the last three months reflects this deep, structural premium.

IX. Forward-Looking Momentum: The On-Market & Pipeline View

A review of assets currently “Under Contract” or in “Escrow” provides the clearest signal of where the market is headed in Q4 2025 and Q1 2026. This pipeline confirms that the bifurcation is accelerating.

Table 3: Summary of “Under Contract” / “Escrow” Pipeline

Analysis of Pipeline

• Class A Pricing Accelerating: The pipeline data is stunning. The asking prices for new, prime Class A assets (10799 W Twain @ $650/SF; Deer Springs Condos @ $610/SF) are significantly higher than the $479/SF “Narrative” sale that just closed. This signals that comps for premier assets will continue to appreciate.
• Southwest Dominance: Four of the six major deals in the pipeline are in the Southwest, reinforcing its status as the most in-demand submarket for capital.

The Bifurcation Widens: The pricing gap is structural. The Class C asset (9225 W Flamingo) is in escrow at $252/SF, while prime Class A assets are fetching 150-200% premiums.

X. Concluding Insights & Advisor Recommendations

The Las Vegas office sales market is healthy but fractured. The “flight to quality” is no longer a forecast; it is the dominant, driving reality. This creates distinct strategies for different market participants.

For Investor Clients (Buyers)

• Core/Core+ Strategy: The “flight to quality” is real and accelerating. You must pay a premium for Class A assets in the Southwest, Henderson, and Summerlin. The pipeline shows this premium is increasing. Your competition is both institutional capital and high-net-worth owner-users.
• Value-Add Strategy: The true opportunity—and true risk—is in Class B/C. The leasing market is against you.2 You can acquire assets at a deep discount (e.g., $252/SF for 9225 W Flamingo), but you must have a clear plan and deep capital for repositioning, amenities, and aggressive tenant improvements to capture the tenants fleeing other B/C buildings.
• Specialty Strategy: Focus on MOBs. They are trading at a premium for a reason. They are defensive, WFH-resistant, and a favored 1031-exchange product.

For Owner-User Clients (Buyers)

• This is your moment. The “buy vs. lease” calculation is heavily in your favor. You can acquire a Class B building (e.g., 6224 W Desert Inn @ $273/SF) for a total occupancy cost that is likely less than leasing Class A space, all while building long-term equity.
• Lock in fixed-rate debt. This is your primary advantage over investors and your primary hedge against future rent growth.
• Target Class B assets in A-grade submarkets (Southwest, Henderson, Northwest). Avoid the Central East unless you are a specialized user.

For All Clients (Sellers)

• If You Own Class A / MOB: You are in the strongest possible position. The market is liquid, and pricing is at or near peak levels. Market your asset’s “defensive” characteristics to a national pool of 1031 and institutional buyers.
• If You Own Class B / C: You have a critical decision.
• Option 1 (Best Exit): Your best buyer is an owner-user. Market your building as a “hedge against rising rents” and “an equity-building opportunity.”
• Option 2 (Tenant-Driven Exit): Your next-best buyer is your own tenant. The Pecos 215 Plaza sale is the perfect playbook: break up the asset and offer to sell directly to your tenants.1
• Option 3 (Investor Exit): To attract a value-add investor, you must be prepared to offer a significant discount (like 2543 S Bruce St @ $51/SF) that provides them with the “meat on the bone” required to justify the high leasing risk and capital expenditure.

Works cited

1. CostarExport 3 Month Office Sales Aug-Oct.xlsx
2. Las Vegas Office Figures Q3 2025 | CBRE, accessed November 1, 2025, https://www.cbre.com/insights/figures/las-vegas-office-figures-q3-2025
3. las vegas – office q2 2025 – Cushman & Wakefield, accessed November 1, 2025, https://assets.cushmanwakefield.com/-/media/cw/marketbeat-pdfs/2025/q2/us-reports/office/las-vegas_americas_marketbeat_office_q2_2025.pdf?rev=a907c18aee964d7fb71044e33ae167cd
4. Las Vegas MarketBeats | US | Cushman & Wakefield, accessed November 1, 2025, https://www.cushmanwakefield.com/en/united-states/insights/us-marketbeats/las-vegas-marketbeats
5. las vegas – office q3 2025 – Cushman & Wakefield, accessed November 1, 2025, https://assets.cushmanwakefield.com/-/media/cw/marketbeat-pdfs/2025/q3/us-reports/office/lasvegas_americas_marketbeat_office_q32025.pdf?rev=1ed7166efdc94305a14ba6c0ad143e55
6. Las Vegas Real Estate Market Reports | Newmark, accessed November 1, 2025, https://www.nmrk.com/insights/market-report/las-vegas-market-reports
7. Third Quarter 2025 Las Vegas Office Market Report – MDL Group, accessed November 1, 2025, https://www.mdlgroup.com/third-quarter-2025-las-vegas-office-market-report/