"Underneath this calm surface, increasing market pressures are driving a change in vendor behaviors, which ... make the market ripe for a period of major disruption," said Skorupa. "These behaviors will become more obvious as the pace of change increases."

Renovations

Requests from clients for renovations rather than new construction are on the upswing

Prior to the recession, it was almost a tradition to implode older Las Vegas properties to make way for new construction. But this trend has shifted in favor of a significant run of renovations that has reinvigorated Las Vegas' ongoing face-lift. Recent projects include the transformation of the Sahara into the SLS Las Vegas Hotel & Casino on the Las Vegas Strip and revamps of several downtown hotel/casinos. More are on the way.

"We have seen a lot of renovations. Clients want to have rooms redone and restaurants as well. There will likely be even more renovations moving forward on the Strip and throughout the area based upon the growing number of RFPs that are out there," says Ross Lucas, Southwest regional manager, Littlejohn Engineering.

The same pattern is seen elsewhere, albeit not as strong. "[Arizona] is in a very similar position to Las Vegas: We are seeing more ground-up projects but many more renovations," says Joel Wallis, vice president of Penta Building Group, Las Vegas.

Residential Goes Urban

As home construction at the city's fringes tapers, commercial firms fill urban niche

Lucas says that even though residential has been slow in many areas in the Southwest, an underlying element impacting the sector is a lack of interest in master-planned communities on the fringes of metro areas.

"The residential contractors were getting farther and farther from the center of the community. What the industry is seeing though, is that the market is not there for those 'sprawl' building types," Lucas says.

Rather, many more millennials are looking to live in urban environments.

"You used to have firms that specialized in commercial or the single family, master-planned community approach," Lucas says. "But right now, the price points in the city are working more for the in-fill developers."