Jul

28

Real Estate Close-Up: Las Vegas

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Las Vegas which is having the worst housing markets in the country now taint Sin City’s commercial real estate market, sending vacancies in all sectors sky high along with job losses and high fuel prices.

According to Marcus & Millichap Real Estate Investment Services its commercial sectors clocked the second-worst increase in vacancies in the past year as there is the main problem is too many empty offices.

Hessam Nadji, managing director of Marcus & Millichap. said “The first domino for commercial real estate was the loss of construction jobs. The second domino was the effect of job losses, foreclosures and lost home equity on the local economy. And the third domino was the national economic slowdown, In Las Vegas 56,000 jobs were created three years ago, but it had lost 5,000 through May, which is a significant turnabout.

The main culprit is the local housing environment. Foreclosures aren’t just a problem of homeowners. Dave Dworkin, a research analyst at Grubb & Ellis Co., said foreclosures on small industrial properties are on the rise in Las Vegas.

To buy an industrial building for their business, owners have taken out second mortgages on their homes a research analyst said. And added due to downward economy they are unable to maintain both payments.

The vacancy rate for industrial buildings is almost 8 percent, nearly double the rate two years ago. The smaller tenant is hunkering down,”

Business owners can still get financing from the Small Business Administration but they fear price will fall, so few are willing to take a gamble on buying their own industrial buildings anymo