Archive for the ‘Las Vegas Commercial’ Category
How is real estate doing in Las Vegas? Depends who you talk to! There are definite signs of recovery and optimism in the air!
After nearly a two year gaming slump, the city's tourism numbers are climbing and room rates are on the rise. Does the improved gaming and tourism numbers mean Las Vegas has begun to rebound from the recession? A better indication is the job market. As the job market improves, people start to buy homes.
The sale of homes, condos and townhomes totaled 46,879 last year compared to 28,618 the year before. Home prices have begun to stabilize as inventory of homes declines and we see investors and home buyers competing for good deals.. The Las Vegas commercial market is viewed as still being distressed. The market is going to have to work thru existing inventory and rents increase before any new construction is considered and that could be not until the year 2015.
The commercial market is going through a period of re-pricing. The floor in pricing won't be seen until there are more transactions. The buying and selling market are pretty much at a standstill wile the rental market is still negotiating downward. We are seeing more businesses wanting to set up shop and bargain hunting for great space at a good price.
For financially well positioned buyers and all cash buyers, the Las Vegas market continues to be a wealth of opportunity as Las Vegas has much better recovery prospects than other regions of the United States, particularly the Midwest and the Northeast. Make no mistake, Las Vegas is the entertainment capital of the world and will make a full recovery. When it does, today's smart buyers will reap the benefits of investing now.
Making Money Buying Fixer Uppers.
When I first got interested in real estate in the 70's, (yes, I am THAT old !) I started by buying inexpensive homes, fixing them up and reselling them. Here it is 2011 and it seems there is an opportunity to do this again. Prices have dropped more than 50% in the last 36 months. The price of the average home is under $100 per square foot. Some people have abandoned their homes and left them in great disrepair. The banks own these homes and for the most part, can not repair them. So they sell them at a discount. If you are a wise shopper, you can find a great house in a good neighborhood that may need $5,000 to $10,000 to fix the home up enough to make it presentable and salesable at a tidy profit.
If you are interested in investing in these types of properties as an investor, give me a call or email me and I will send you more information.
The time to make money is when there is blood in the streets!
The Las Vegas commercial retail market still shows the strain of the current economic downturn. Vacancies, especially in newer constructed centers are running 50% or more. There is little new commercial construction on the horizon this year. The current retail market is not bad news for everyone.
There are some bright spots for Investors with cash looking for good opportunities, business able to expand and new tenants looking to lease space. For tenant looking for more space there are more location choices and more negotiating power for tenants. The current retail market provides businesses the opportunity to expand by taking advantage of exceptional deals in both leasing and sales by motivated landlords and sellers. Don’t wait too long because timing is critical. Many buyers on the residential side sat on the sidelines just 6 months ago and now are competing with multiple offers on properties and banks not willing to make the concessions they were 6 months ago.
As the Economy Goes, So Goes The Rental Market
“The real estate economy is a large, integral part of the general business economy. Housing affordability, the availability of credit and interest rates influence the demand for real estate. Local population trends also affect the value of real estate.
The changes in supply and demand, due to the economy also affect commercial leases. When the economy is doing poorly, there is lack of demand for a businesses services or product, the business may close and the unit can become vacant. As this continues this not only affects the property owner’s bottom line but the remaining businesses leasing feel the effects. Vacancy rates climb and the downward trend becomes more severe.
Property owners must be proactive. A good commercial property owner or manager tries to stay ahead of the market by understanding the distress of the economy on their tenants and working with the existing tenants to help them stay in the property during tough economic times. It is better to collect reduced rents than no rents at all. A vacant unit can take months to rent and thousands of dollars in needed tenant improvement money to attract a new tenant not to mention free rent.
Work with existing tenants. By working with existing tenants and anticipating changes in the market and adjusting rents accordingly, property managers can minimize the effect of contractions in the real estate cycle and keep vacancies as low as possible. When space is in short supply, rents are high. When there is a large supply of vacant properties, landlords have to be aggressive to lease space.
New Tenant Leases. “You don’t get a second chance to make a first impression.” Prospective tenants form their initial impressions of the premises based on “curb appeal”. After the first impression is the usability of the space for the tenant’s intended use and price and terms. Today it is a tenant’s market. A landlord has to be flexible and have a clean, well positioned property with an attractive price point to attract today’s tenants.
Is Las Vegas ready to make a comeback?
After nearly a two year gaming slump, the city’s tourism numbers are beginning to climb. Doe the improved gaming and tourism numbers mean Las Vegas has begun to rebound from the recession? Gaming and sales tax make up nearly 2/3rds of the state’s revenue. Revenue was up in November 2009 by almost 28% yet convention attendance was down 13% from November of last year.
In 2009, the sale of homes, condos and townhomes totaled 46,879 compared to 28,618 the year before. Home prices have not stabilized yet and the median home price fell over 22% even while inventory of homes on the market declined 11%. The Las Vegas commercial market is still viewed as being very distressed. The market is going to have to work thru existing inventory before any new construction is considered and that could be not until the year 2011. The commercial market is going through a period of re-pricing. The floor in pricing won’t be seen until there are more transactions. The buying and selling market are pretty much at a standstill wile the rental market is still negotiating downward. It is expected that the capital market are going to have to expand and vacancies are going to have to be cut before lenders are going to view Las Vegas as a market they once again want to lend in. With over $80 billion dollars in commercial mortgage backed securities reaching maturity in the next 18 months, the last thing lenders want to do is extend their position in Vegas until this mess has had a chance to work itself thru.
Is now the time to buy? For financially well positioned buyers and all cash buyers, the Las Vegas market is a wealth of opportunity as Las Vegas has much better recovery prospects than other regions of the United States, particularly the Midwest and the Northeast. Conventions are being steadily booked, strip hotels are near full and with no new construction being developed, it should be a short time before Vegas is back on top and in full recovery mode.