Commercial Real Estate in a Recovering Economy 

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

BUY HOMES AS AN INVESTMENT:  Whether you are a first time home buyer or looking to take advantage of low prices and quality real estate, buying homes gives you the best return on your money!

My savey investors are looking for good value and well placed homes to acquire  My first time home buyers and back to market buyers are finding the low interest rates and programs such as FHA and Home Path are great programs to get you into a home.  About half of the homes being sold are for cash.  Short Sales, Foreclosures, Auctions and HUD homes for sale – A buyer needs an agent to represent them that is on top of all of the new buyer programs and only represents buyers.  "ME"   I am a buyer's agent and a tenant's representative for Commercial & Residential.  Not only do I only work for you, my services are "Free" to you.  I am paid by the owner.

Las Vegas was one of the hardest hit cities by the “Great Recession”: As we enter mid season into 2011, Las Vegas is slowly digging itself out of the downturn.  In 2010 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 in 2012:  Real estate was at a near standstill in 2010 but started on the road to recovery in 2011.  Prices fell, rents fell, vacancies climbed and financing was almost impossible to find.   While it may still be too early to tell when the the Las Vegas real estate market will fully rebound, there are encourgaging signs.  Room vacancies are down and room rates up on the Strip.  New business are opening their doors and business is doing well.  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 or tenant.

    Now is the Time to Buy Distressed Las Vegas Real Estate.  The residential market in Las Vegas is improving, we still have a way to go before prices begin to rise.  In fact, it is the perfect storm for savey investors and home buyers, cheap prices and low interest rates.   Prices are still low but consumer confidence is back and well priced, well placed homes are receiving multiple offers as inventory dwindles.  Low prices coupled with low interest rates and good properties on the market for sale creates the “Perfect Storm“ for investors and home buyers alike!

   The commercial real estate market is on the road to a slow recovery. Prices have bottomed out.  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.  Rents are lower than 2 years ago but as activity picks up, so will rents.

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: Location and value are still the most important elements for consideration by commercial tenants.  If you are a business owner looking for space, Call me.  A big part of my 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 me 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 me 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.  The economy is recovering and 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 01/26/13

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.
 

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!

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. 

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.

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.

City Center is Open

Half of the center is not ready for prime time and about 30% of the high end shops at the retail shopping center, Crystals, are not open yet but if what is available is any indication of what is left to come, then this project is a must see when you come to Las Vegas!

The Veer Towers

Crystal Retail Shopping

Forget Shopping in New York and Rodeo Drive in Beverly Hills. When all of the retail stores open at Crystals

Prada – Coming Soon