Las Vegas Businesses Hurt By Huge Rent Hikes May Force Moves Or Closures
Las Vegas’s small business owners are feeling the pinch of inflation, rent hikes, and rising costs on just about everything. Some small businesses are seeing 20%-30% hikes in their rent. Many of these owners don’t see how they can bring in enough money to stay in their location.
Why Are Small Business Owners Seeing Massive Rent Hikes?
There are many reasons, according to an article written by Kelsey McFarland on KTNV.com. Firstly, there’s the issue of supply and demand. There is currently a high demand for retail space here in the Las Vegas valley.
Secondly, the cost of doing business has risen dramatically in the past few years. Insurance rates have gone up. Energy prices have skyrocketed. Water costs more. Tax rates are up.
How Will Business Owners Deal With Rent Hikes?
Therefore, owners of retail spaces like strip malls and business complexes have seen operational costs rise. Accordingly, they must pass those costs on to their renters to stay in business. That is why many Las Vegas small business owners are seeing huge rent hikes.
Given these points, what will small business owners do? Certainly, raising the prices on their products is one example of how they can manage a massive rent hike. However, when that happens, many customers may decide their products are not worth the higher prices. Consequently, business suffers, and the owners are faced with a “catch-22” situation.
Besides raising product or service prices in this situation, other options include moving or closing for good. All of these options seem very unfortunate, and tough decisions will be made.
Las Vegas Commercial Real Estate Prices Will Continue To Rise
Experts are predicting that commercial real estate prices will continue to rise. The Las Vegas area is seeing some incredible business expansion. Our city and state offer many tax advantages to businesses. We are seeing many professional sports franchises starting here (Vegas Golden Knights) or moving here (Raiders and A’s).
In like manner, there are talks of the NBA coming to town. Formula 1 races will take place here for the next decade. Additionally, plans for the Brightline train from Los Angeles to Las Vegas are in the works. With all of this positive business expansion in the valley, demand for space will be high. Generally, higher demand leads to higher prices.
What Can Small Business Owners Do To Deal With Rent Hikes?
Per McFarland’s article, the commercial real estate agents she contacted offered good advice. Basically, small business owners should contact a real estate expert one year before their lease is set to expire. In this manner, they will know what kind of rent increase to expect. They will be able to plan accordingly.
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Larry Martino is the long-time afternoon drive personality on 96.3 KKLZ. The views and opinions expressed in this blog are those of Larry Martino and not necessarily those of Beasley Media Group, LLC.
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