Glimmers of Hope on the Commercial Foreclosure Front in Las Vegas
Las Vegas commercial foreclosure front is showing signs of pessimism laced with optimism for the long term Its commercial real estate market has been hit by the recent economic travails but increasing foreclosures and sharp fall in prices will provide opportunity to many to quickly recover than in other regions. Panelists were speaking about this to representatives of the commercial real estate group.
None of those in the panel who had spoken on 17th September to the National Association of Industrial and Office Properties (South Nevada chapter) had expressed their optimism about a swift recovery. They had bemoaned the languishing of commercial real estate causing the lenders to be shy of lending money for commercial ventures. Recovery is heavily dependent on creating of jobs – the latter being the drive behind the demand for commercial areas. But with the unemployment rate being more than 13% it appears that the health of the economy will not improve for many years to come.
The optimism is based on the falling value of commercial properties. This has whetted the appetite of investors to strike at the right moment. An official from the Nevada State Bank said that very soon the bank would be putting in the market a good number of troubled properties in the market during the fourth quarter.
John Wright of National Valuation Consultants said that the fall of values in the commercial real estate in Las Vegas has been staggering. Other cities have suffered but none so badly as Las Vegas where in some instances the value has dropped by nearly 70%. He said, “When you look at market declines, places like Las Vegas — the trajectory could be more sharply upward in this market when it comes back,” Wright said. “There are going to be good deals to be had. When that happens, the growth will come back.”
Patricia Nooney of CB Richard Ellis said the valley which had witnessed “ a great ride upward” is now seeing action in the opposite direction with the same intensity. However with the country continuing to see increase in unemployment the mood of pessimism continues to persist. Nooney feels that the situation will not return to the levels of 2007 and 2008 till 2013.
By rule of thumb the vacancy rates in business space will not reach its height until 2010. Rents will not start to climb up till 2011. The tight fisted attitude of consumers has been affecting retail sales. This will not change till the end of 2011.
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October 13th, 2009 at 9:01 am
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