With the current glut of vacant and for lease properties in Las Vegas, the demand for land to build is almost non existant.  This is a far cry from the land grab era just a few yearrs ago when a wealthy New York-based company controlled by Israeli billionaire Yitzhak Tshuva paid $1.24 billion, roughly $36 million an acre, for the New Frontier in 2007.  That land today is worth a fraction of that if you were able to find a buyer at all.

Smaller parcels that were purchased by private groups for development or investment purposes before the "Great Recession" have gone back to the bank. About half of commercial mortgage defaults in Las Vegas last year were for vacant land.

It is reported by Allkied Analysis that prices for raw, undeveloped, land in Las Vegas have fallen 74 percent from their peak of $939,357 an acre in fourth quarter 2007, That means that excluding the resort corridor, the average price dropped to $243,368 an acre, or $5.58 a square foot.  Sales, if there are any, are mostly distressed or trustee deed transfers with lenders.

With nearly 28 million square feet of vacant commercial space and still a very large excess inventory of foreclosed homes in Las Vegas, I would guess any investor looking to acquire land on speculation would have to account for at least a three to five year hold. 

  My primary job is to find your company the best location at the best price! 

  Tenant Representation  : How often do you lease office space? Hopefully, you don’t have to do so more than every 3 to 5 years or so; the same with lease renewals. If you are like most tenants, leasing office, retail or industrial space is a major commitment. While the cost of leasing tenant space can significantly affect your bottom line, it also has many other consequences. Some of these include employee satisfaction and productivity, growth constraints and corporate image.

  Today, more than ever, the right location for the right price is important.  In this recovering economy, selecting the right location for the right price is key.  

Location, Location, Location
Take advantage of our personal assistance and knowledge of the various markets.  Whether you are relocating your firm, starting a new company or expanding a business,  we can make a huge difference in the successful outcome of your search for lease space. A tenant leases business space only a few times in their business life, while landlords lease space over and over again. Level the playing field by working with a good tenant representative like Terry Barone, broker .

Job Growth
Professional and business services created 12,000 new jobs over the last 12 months, reports the state Department of Employment, Training, and Rehabilitation. The leisure and hospitality industry created 16,500 new jobs, and construction generated 18,300 positions over the past year. Clark County averaged a seven percent month-to-month job growth during the last 12 months, with unemployment hovering around four percent. It's an impressive feat considering the Las Vegas Valley grew by 94,589 new residents during the same time.

  Various Space Users 
 We recognize that business users with space requirements vary. As vacancies have dropped around the Las Vegas area and markets are tightening, the competition for premium space to lease is heating up, making making our company an essential part of your planning team.  Our smaller tenant users are provided with  emails of possible locations to consider.  Review the information and select locations you want to drive by for further study,  Locations that seem to meet your need in terms of price and location will be plotted out, listing agent contacted and an appointment made to see the space and have the leasing agent answer any questions you may have.  Meeting the needs of the larger tenant requires a thorough understanding of the market and the players. Our in house special analytical and research skills and services will assist you with your site selection by providing critical demographic information to assist in the decision making process at no extra charge.

Have a site already selected or want critical leasing information on the surrounding area before you renew your lease?  For a small consulting fee, we can provide you the necessary information to assist you in your lease decision OR work with us as your tenant representative and site locator and our fee is usually paid for by the Lessor.

Why Use Prime Source as Your Tenant Representative?
Market knowledge is a key ingredient making a big difference. Having a grasp on asking rates versus deal rates and negotiating incentives is important to make sure you get the best terms available.

We can recommend several top notch attorneys or CPA's to assist you in your business planning.

We have a good standing with a number of the top landlords and leasing agents around Las Vegas.  We understand the numbers and can help translate data into implications for your business – based on your growth strategy within a particular building or market, for example.

We can assist you with financial analysis to help you select the most cost effective location.

Expert negotiation skills are critical for a favorable outcome. Our representation gives you subtle leverage during negotiations,  As an added benefit, because of past negotiations, we may know the temperament of a particular landlord and/or landlord’s representative, and therefore be able to better negotiate without jeopardizing the transaction. This is a definite advantage when it comes to lease renewals, too.

Familiarity With Lease Documents is a Must
We have a working knowledge of the documents necessary to conduct the transaction. These documents include requests for proposal, letters of intent, lease agreements and carve out's for tenant concessions and vary from market to market.

Tenants' General Rules of Thumb for Space Planning
The general rule of thumb is to allow 175 to 250 usable square feet per person depending upon the type and style of the business. This figure can vary based upon special needs such as extra-large conference rooms or storage requirements, but will include normal amenities within a general use office. For an accurate determination of space requirements, a space planner should be consulted.

These standards may be helpful in estimating the amount of usable space required for your business.

• Typical President's office or Chairman of the Board – 250 to 400 sq. ft. (4 to 5 windows in length)
• Typical Vice-President's Office – 150 to 250 sq. ft. (3 to 4 windows in length)
• Typical Executive's Office – 100 to 150 sq. ft. (2 widows in length)
• Partitioned Open Space – Clerical Supervisor or Manager 80 to 110 sq. ft.
• Open Space – Clerical or Secretary 60 to 110 sq. ft.
• Conference Rooms – 15 sq. ft. per person: theater style – 25 to 30 sq. ft. per person: conference seating
• Mail Room – 8 to 9 ft. wide with 30" counters on either side. Length depends upon amount of usage
• Reception Area – 125 to 200 sq. ft. Receptionist and 2 – 4 people – 200 to 300 sq. ft. Receptionist and 6 – 8 people
• File Room – 7 sq. ft. per file with a 3' to 4' aisle width
• Library or Computer Room – Allow 12" for bookshelf width – 175 to 450 sq. ft. with seating for 4 – 6
• Lunch Rooms – 15 sq. ft. per person, not including kitchen. Kitchen should be 1/3 to 1/2 of seating area
• Clerical Pool Areas – 80 to 100 sq. ft. per person
• Corridors – 20% to 30% of the total usable area
• Coat Closets – 1 lineal ft. for 4 coats 3 per person
• Water Coolers/Drinking Fountains – 1 unit per 75 employees
• Suggested Column Spacing – 28' to 30' per bay
• Suggested Window Mullion Spacing – 4'6" to 5'. This determines office width

Estimated leasing process and timing

Define basic space requirements – 2 Days

• Size and layout
• Expansion and option space
• Price and term based on market Info & availability
• Image and quality
• Geographical area
• Intangibles and goals

Selection / interview with support team – 1 to 7 days

• Prime Source Leasing Agent
• Space Planner
• Interior Design (if desired)
• Attorney / CPA

Determine alternatives available – 7 to 30 days

• Review available sites provided by email by agent
• General market knowledge of space available
• Search of database and plotting possible sites
• Tenant drive locations and narrows search
• Verification of terms and conditions by agent
• Review list of alternatives

Narrow down locations – 7 to 14 days

• Drive by Inspection of likely possibilities
• Selection of 2 – 4 best locations
• Coordinate with agent for interior showing
• Selection of top 1 – 2 locations
• Prepare Letter of Intent for top site or sites

Analysis of proposals and alternatives – 1 to 7 days

• Financial analysis
• Space layout considerations
• Tenant considerations
• Customer access and business visibility
• Intangibles and goal analysis

Final selection – 7 to 30 days

• Choose top locations
• Establish terms required
• Prepare and present Letter of Intent (LOI)
• Approve, re-negotiate, or select other alternative
• Review lease for business points
• Have attorney review lease for legal points
• Re-negotiate any final ease terms

Tenant improvement build-out – 30 to 120 days

• Hire space planer or contractor
• Submit plans for approval
• Report progress
• Final walk through check
• Sign lease

Time to Allow

• Before Tenant Improvements – 24 to 103 days
• Including Tenant Improvements – 54 to 194 days

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 2010 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!

We are digging for the best investment deals for you!

Investors are buying up Las Vegas foreclosures.   If You’re Interested In Investing In Residential Real Estate, You’ve Probably Made A Wise Choice.  Investors are making their biggest push yet to buy foreclosure homes in Las Vegas. I don't know of a faster way to recoup some losses of this recession and to build wealth quickly for the future. Buyers who used cash to purchase their homes accounted for 47.1 percent of sales, said DataQuick spokesman Andrew LePage.

Somehow Las Vegas Is Always Number One At Something.  This time it is nothing to be proud of. Las Vegas is number one is foreclosures in the Untied States. That is real bad news is you own a home and want to sell it. But this could be good news for smart investors that want to swoop up some fantastic bargains. The bargain chase is on! The most successful investors are all cash investors. If you are going to try to buy with a loan you will have to get in line behind all of the investors with fists full of cash. Investors with cash have an advantage in that their offers aren't conditional on obtaining a loan so banks often prefer selling to them than taking the risk that another offer will fall through. They are also often quick to react when bargains appear.

Foreclosures Are Still Happening  Although the percentage of borrowers behind on payments continues to grow, the number of homes lost to foreclosure in Nevada—and thus available for resale—fell in 2009 from a year earlier and continues to fall. The number of foreclosed homes owned by banks or mortgage investors and available for sale nationwide dwindled to 617,000 in December from a peak of 845,000 in November 2008, estimates Barclays Capital. December was the DataQuick reported 5,068 sales of single-family homes, condos and new homes in October. That’s a 22 percent increase over October 2008 and the highest October since October 2006 when 5,693 homes were sold. It marked the 14th consecutive month that sales have risen on a year-over-year basis, LePage said. The demand for homes remains strong because of the increased affordability and low mortgage rates, LePage said in an article in the Las Vegas Sun.

Las Vegas homes are tremendously undervalued.  "I think we're tremendously undervalued right now," SalesTraq President Larry Murphy said. "One reason I say that is because you can't replicate a home today for what you can buy it for. Nobody's going to build a home if they can't get their money out of it. That's why nobody's building." That's another reason Murphy says homes are undervalued. Cash flow on rental homes is strongly positive, he said. A savings account or certificate of deposit on $150,000 might yield $1,500 a year, or $125 a month. Buying a house for $150,000 and renting it for $1,000 a month brings in $12,000 a year. In the 1980s, investors were happy to break even on a rental home while deducting interest and taxes, he said. Maybe they'd make a decent profit if they held it for four or five years and then sold.

Housing Prices Are Bottoming Out.  Marta Borsanyi, principal of Newport Beach, Calif.-based Concord Group, said housing prices are bottoming out in Las Vegas, but a full recovery in the housing market won't occur until first quarter 2012. She defines full recovery as three to four new-home sales a month in each new subdivision and low single-digit home price appreciation. Instead of foreclosing, banks will be doing more short sales, or deals in which homes are sold for less than the mortgage balance. With the recession slowly winding down and CD rates at record lows, this seems like the right time to make a smart real estate investment.

Case Made For Investing In Residential Real Estate.  You’ll probably earn more on your rental house than you can earn from the record low returns on CDs or money market accounts. Why put $150,000 into a CD at 1.5% when you could buy a house rent it out and earn 6% or more. The best money market out there only pay 2.5% This simple investment strategy does not take into account tax savings or the possibility of property appreciation. Property appreciation? What is that, you say! Well folks, it is already starting to happen in other parts of the county. We are not building right now much, yet babies are still being born, kids coming of age and our population and work force still expanding. The world has not stood still for this recession and neither will it during the recovery. As an investor, don't be reactive, be proactive. Many of the people who lost money in real estate bought too late and now are selling too early.

Supply and Demand:  The real estate market, like the stock market, always comes back due to supply and demand. Business, the stock market and real estate run in cycles. Remember when tech stocks were dead? Now they are hot again. If you have grey hair like me, you have been through many of these cycles. What makes you money is timing. Buy when people are selling, hold then sell when people are buying! Lets see: $150,000 at 2.5% long term money market = $3,750 annual yield. Buy a $150,000 home for cash and rent it at $1,000 a month = $12,000 or $8,250 more ar! This doesn’t take into account the depreciation (another $4,000 a year on a $150k rental) which can boost your overall yield to 10% or better. Good Business Is Based On Supply And Demand.Sell when people are buying and buy when people are selling. Those who invest in real estate also expect to generate capital gains as property values increase over time. The paper loss for depreciation helps provide a tax shelter for your income most real estate is purchased, at least in part, because of the tax benefits that accrue for the owner. Ownership of real estate can produce substantial tax savings that can transform a fair investment into a very good one. The goal is to protect large amounts of income – accruing from the property itself or from other sources – from taxation. Investment real estate can be very effective at doing this.

Deductions That Are Available For Most Real Estate Investments Include the Following: Mortgage loan interest can be deducted to offset an equal amount of income. ~ Property taxes levied against investment real estate and paid to state or local governments can also be deducted from taxable income. Insurance premiums for coverage of real estate investments are deductible from taxable income. ~ Property Management is another hassle free expense deduction to consider. ~ Maintenance expenses are fully deductible in calculating the tax liability for a real estate investment. Expenses you incur for repairs can be deducted from your other income, thus arriving at a lower tax bill. Being able to deduct those expenses is a very important benefit of owning investment real estate, one which is not available to homeowners. ~ Depreciation accounts for the decline in value of an asset over time, including most real estate. Depreciation decreases the accounting value (the value of the property as shown on financial statements) of real estate and at the same time offsets an equal amount of income from taxation, yet does not affect the market value of the property. Investors generally obtain maximum tax benefits by depreciating real estate as quickly as possible. Rapid depreciation offsets income and saves taxes sooner. Residential rental property currently must be depreciated equally over twenty-seven and one-half years, while commercial investment property must be depreciated over thirty-nine years.

Build Your Net Worth Up Quickly Create a Flexible Investment Portfolio: An investment portfolio that includes several free and clear residential investment properties is great leverage in negotiating and acquiring larger investment properties in the future. Lenders know there is always a market for residential real estate. Not so with other types of commercial investments. There might be a glut of office buildings like you own on the market at a time when you are trying to get a loan on a great opportunity. A commercial retail center you are touting as a cornerstone of your real estate empire may be coming up for loan renewal and rents have dropped. A small group of investment houses can be moved around, gifted easily as part of a family trust, used for collateral, cross collateralization, traded, exchanged or used as part of a down payment on a larger investment.

Savvy investors should have at least 5 or 10 small rentals, free & clear in their portfolio.

Invest Into the Perfect Storm. Invest with Prime Source Commercial

2010 is definitely still going to be a buyer’s market.  The demand for these homes is strong with sometimes multiple offers and bids on bank owned homes and short sales.   However, with continued low interest rates and still a steady stream of homes coming on the market.  If a large or small investor is looking to improve their portfolio with quality real estate, Las Vegas is the place to invest!  Is this a horrible real estate market? 

Depends if you are a buyer or a seller.  For some reason we usually define a “good real estate market” as one in which there is low inventory and prices are rapidly increasing.  This kind of a “good” market is difficult for buyers and investors.   Buyers and investors like prices to be low, interest rates low and lots of inventory to choose from! 

This is the perfect storm for investors and buyers alike.  The price of homes in Las Vegas has dropped for over 30 months. The median price of homes  is now about 60% less than the peak price of $312,000 in the latter part of 2006.  Prices have in effect, been rolled back to 1999 median home sale price of $130,000 in 2009 compared to $129,000 in 1999. 

Summary:   One person’s mis-fortune is another’s fortune.  None of us have a Crystal ball or Ouija board to reliably predict the future.  Most people were not prepared to financially weather “The Great Recession”.  None of us have seen this kind of a downturn in our lifetimes. 

Is this the new paradigm?  Perhaps.  One thing is for sure.  As things change you must learn to change with it or you are left behind.  Instead of sitting there wringing your hands about how “Bad” the market is, spend your time figuring out how you can shift your position to take advantage of today’s market.  There is lots of opportunity in this market, you just need to understand how you can profit from it. 

Terry Barone and Michael Bash of Prime Source Commercial  are currently working with several investors to take advantage of this “buyers market”.  If you are interested, feel free to call or email us for more information.

Prime Source Commercial has all of the pieces to the puzzle! 

   Las Vegas has been one of the hardest hit cities by the “Great Recession”: As we enter into 2010, Las Vegas is slowly digging itself out of the downturn.  In 2009 the residential segment of real estate actually saw one of the most active in terms of sales for the last five years!  Even with a robust year in sales, the amount of foreclosures is still too high and a full recovery is still at least a year away.

There is optimism as we begin 2010: Commercial real estate was at a near standstill in 2009.  Rents fell, vacancies climbed and financing was almost impossible to find.   While it is too early to tell how the commercial real estate market is going to be in  2010, one thing is for sure.  If you are a buyer or a tenant, this is a good market for you.  More supply, and anxious sellers and landlords mean better deals! It is a great time to be a buyer,

    Now is the Time to Buy Distressed Las Vegas Real Estate. While the residential market in Las Vegas is improving, we still have a way to go before prices begin to rise.  In fact, 2010 prices will remain low and inventory abundant.  Low prices coupled with low interest rates and good properties on the market for sale creates the “Perfect Storm“ for investors and first time home buyers alike!

   The commercial real estate market is struggling. Prices are still in a downward trend.  There are some good deals out there but you must use good due diligence before you buy.  We work with our investors to not only investigate the market today  but work to understand what the market is going to be in the near future and invest accordingly.

REO’s, Short Sales, Bank Owned Properties, Motivated Sellers:   We are REO Specialists. We are acquainted with Special Servicers, REO departments at leading banks,  landlords looking to fill empty space and
motivated commercial sellers. Prime Source Commercial Services, is a real estate
brokerage and investment firm with a strong background in finance. When working
with our clients and partners to acquire new properties to be developed, we work
with outside engineers. architects and contractors to value engineer projects to
make sense
financially while meeting our practical needs, ecstatically.  Allow us to assist you in your acquisition and funding.  Want to diversify your portfolio and maximize your return by deferring taxes in a 1031 exchange? We can help.

Interested in leasing or acquiring quality commercial property?  If you are considering investing, looking to expand your business, acquiring property to expand your portfolio or want to develop an opportunity in the Vegas Valley, now is the time!  Las Vegas has been voted the number one large city to do business in by Inc. Magazine.  Bookmark us as your prime source of information about what is going on in real estate around Vegas today. 

   Tenant Leasing: As Tenants struggle in this economy, they must either renegotiate their lease, shut down or relocate.  If you are a tenant looking for space or a landlord needing help in negotiating with a tenant.  Call us.  A big part of our business is tenant leasing! 

  Prime Areas Of Specialty: Prime Source Commercial works with commercial lease tenants and investors, in addition to serving developer clients by bundling several related real estate services into customized packages that are unique to the needs of our clients and partners.  Prime Source Commercial works with investors, companies expanding to Las Vegas, contractors and developers in locating real estate opportunities and then assists in providing access to necessary debt and equity capital to successfully fund the project if needed.  The company’s ability to identify opportunity, assist in the due diligence and provide debt and/or equity as needed is the “Prime Source Advantage”. 

  Have a property to develop?:  Consider joint venturing with us.  Let us assist you with the debt or equity financing, with a project analysis of an anticipated development, identify items and issues that will be required by a lender and suggest design elements that will enhance your project and save you money.   Do you have a real estate project in mind or expanding your businesses and need assistance in site selection, conceptual design and planning, project assessment, or the selection of a qualified contractor?  Need project financing or want to learn the benefits of cost segregation?     Contact us for an initial free consultation.

  Entertainment, Dining and Hospitality: Prime Source Commercial offers brokerage and consulting services for Southern Nevada in the areas of site selection for hotels, restaurants, taverns and casino brokerage opportunities, opinion of value,  project consulting, acquisition and disposition strategies.  Considering opening a new or acquiring an existing casino, restaurant, tavern or hotel in Las Vegas or Southern Nevada?  As consultants we can assist your company with property searches, financing, theme development, site selection, due diligence, and planning an acquisition strategy. We specialize in brokerage and consulting to prospective purchasers and sellers of sites for  hospitality properties.  Our emphasis is on individual, personalized consultations. 

  One-Stop-Reality-Shop: Why Prime Source Real Estate Services should be your only real estate company.  We have external experts in the fields of  Commercial, Construction, Financing and Residential.   We give each client one hundred percent of our team’s effort!  You have the core team and outside team members that have an alliance with us all working for you.  Together, no matter what your real estate or finance needs are, residential or commercial, we have it covered!  We want to be your prime source of information and service, in the Vegas Valley.  Make Prime Source part of your team.  Call  Terry at (702) 682-5202 today.

  Growth and Development:  The dynamics of the real estate market in Las Vegas is astounding!  Real estate prices are down!  Smart investors are looking for quality investments.  Don’t expect
today’s prices to remain low.    While real estate prices are  very reasonable compared to most other areas, prices will go up.   Now is the time to get yours! 

  Retirement: Las Vegas is the one of the preferred retirement choices for a variety of reasons.  Warm winter sun, dry climate,  reasonable real estate prices, no state income tax, low utility rates, golf courses, parks and planned community senior activities.  Since almost everyone who now lives in Las Vegas has moved here from another part of the country, seniors find it very easy to make new friends. 

  I want to be your real estate broker!  

Lets Get Started. Call Me Direct Today!.  I am waiting for your call. 

Terry Barone, Broker  (702) 682-5202

Email:  tdbarone@primesourcecoml.com

updated 02/18/10

Downturn in Multi-family.  Multifamily is suffering as all other segments of commercial real estate are.  While over the long term, the multifamily sector has consistently outperformed other property investments while experiencing less volatility, this downturn in the economy has affected this sector as well.  Gone are the days of "easy money" when even marginal investment decisions yielded positive results.

Tomorrow’s success stories will be written by investors who have the expertise to combine macro-economic research with a thorough understanding of local market environments.

The recent boom in the Las Vegas real estate market had dramatic effects on apartment availability and rental rates.  Due to demand, over 10 percent of the valley's apartment properties were converted to condos for purchase.  Few new apartments are being built or have been built in the last 3 years.  This has created a very favorable climate for clients buying multifamily with good upside potential.

Foreclosures affect the Market:  Residential foreclosures have affected the market first by flooding the apartments with displaces former home owners.  Now as there are more and more vacancies being offered up for sale in single family homes, they compete with apartments.  Apartment leases are down from last year due to supply and demand.

Classifications

• Class A
  Communities characterized by newer construction in emerging neighborhoods with abundant amenities (within the community and units), including technology, security, parking facilities and other high-end qualities.
• Class B
  Communities characterized by average construction quality providing average amenities (within the community and units) and average features.
• Class C
  Communities characterized by older construction, moderate to poor physical appearance typically located in more mature parts of the Valley and in need of some refurbishment measures.

Average Rents:  Average asking rates are based on those provided by on-site property managers or other third-party sources. By the close of 2009, the Las Vegas Valley apartment market was flat with average asking rents at about the same levels as the year before. Ocupancy levels have been somewhat stable and a little above historical norms.

Average rents in Las Vegas were $825 per unit per month, with units averaging 901 square feet. On a per-square-foot basis, rents reached $0.92 per month. Average rental rates were up 6.0 percent over the same quarter of the prior year, maintaining a growth rate well above historical averages. In addition to upward pressure on pricing, supply additions remained modest and vacancies remain at just over four percent..

Class B apartment communities posted average asking rents of $824 per unit, representing a 5.2-percent increase over the prior year. Occupancy levels remained healthy, yet slightly below the prior year. As of year-end, occupancies averaged 95.3 percent, compared to 95.9 percent during the fourth quarter of 2009.

In the Class C sector, rents averaged $706 per unit, which was up from the 6.6 percent from the $662 reported during the same quarter of the prior year. Occupancy levels improved during the last quarter of 2005, reaching 96.0 percent from 95.8 percent one year ago.

In this economy, as a tenant, don't be afraid to ask for a month's free rent.  As a property owner, work with your teants to keep them happy and in place.  Otherwise you may loose several months rent and be forced to make further concessions!

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.

“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.

When will the recession be over in Las Vegas?

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.