Leaving Las Vegas: Camden Property Trust Sells Entire Nevada Portfolio to Oaktree/Bascom JV

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Camden Property Trust has done what few gamblers are able to, the REIT has officially left Las Vegas with a lot of money!

The company began its first quarter earnings conference call with Faith Hill singing Lets Go to Las Vegas and ended it with Sheryl Crow singing Leaving Las Vegas. The musical bookends signalled to investors that the company has officially exited the Las Vegas marketplace.

“The 18 years covered by those two song titles represent our tenure in Las Vegas which came to a close this week. It’s been a great ride,” said Richard J. Campo, Camden chairman and CEO.

The day before the earnings call, Camden completed sale of its Las Vegas portfolio as part of the REIT’s capital-recycling initiatives. The portfolio included 15 communities with 4,918 apartment homes, a retail center, and 19.6 acres of undeveloped land.

The buyer is a partnership between The Bascom Group and Oaktree Capital Management, a joint venture that has recently been teaming up on apartment purchases. The joint venture paid $630 million for the 4,918 apartment unit portfolio, roughly $125,000/unit.

CamdenLogo_calogo1321The communities in Camden’s Las Vegas portfolio were built in the 1990s. The properties reported a combined average occupancy of 95% in the first quarter with average rents of $874/unit.

Camden decided to cash out its Las Vegas assets after remaking the balance of its portfolio, Campo explained. The Las Vegas apartments are roughly twice as old and had monthly revenue of roughly $500 per home less than the balance of its portfolio.

“We have consistently sold older, non-core properties and replaced them with more current and competitive properties,” Campo said. “This effort has increased our revenue per apartment from a $1,042 per month to $1,566 per month.”

“We’re not calling a top to the multifamily market with our sales,” Campo was quick to add. “We’re simply taking advantage of the market opportunity to improve the quality of our properties, reinvest in development on a significant cash-flow positive basis, pay down debt, and return capital to shareholders.”

Camden currently has no other single market portfolio of apartments averaging the rents/home that Las Vegas was getting. Its next lowest market would be Raleigh/Durham where it owns eight communities with 3,054 units averaging $1,002/unit rents.

For more information on the sale, see CoStar Comp #3578091.

Camden’s Las Vegas Portfolio Sold 
Complex — No. of Units — Rent/home
Camden Palisades — 624 — $773
Camden Del Mar — 560 — $1,032
Camden Bel Air — 528 — $790
Camden Tiara — 400 — $965
Camden Commons — 376 — $851
Camden Vintage — 368 — $776
Camden Breeze — 320 — $820
Camden Fairways — 320 — $957
Camden Pines — 315 — $913
Camden Pointe — 252 — $801
Camden Summit — 234 — $1,192
Camden Canyon — 200 — $965
Camden Hills — 184 — $555
Camden Cove — 124 — $781
Camden Legends — 113 — $876

SOURCES:
Camden Property Trust
http://www.costar.com/News/Article/Leaving-Las-Vegas-Camden-Property-Trust-Sells-Entire-Nevada-Portfolio-to-Oaktree-Bascom-JV/181797

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Tips for Identifying Real Estate Fraud

Realtors report squatters in foreclosed homes try to rent them to unsuspecting tenants.

With its still-copious vacant units, our region is prime real estate for rental scam predators, according to Las Vegas and Southern Nevada experts.

And it’s not just an online financial attack anymore.  It’s flesh and bones dangerous.

Coincidentally, a local Las Vegas realtor, said she recently experienced a rental scam encounter of the scariest kind. Here’s how she described the situation:

“Just a week ago, I had a prospective tenant call me and tell me that my sign was in the window of a property near UNLV, and it said ‘For Rent.’ While the prospective tenant was on the phone with me, another man came out of the property and approached him. He claimed to be the maintenance man for the owner, and he offered to take the man inside to see the house.

I told the prospective tenant to roll up his window, hold on to his wallet and drive away quickly because this is a scam artist renting out a vacant or foreclosed home that does not belong to him. Interestingly, the scam artist went so far as to steal a Realtor sign to use to try to make his rental story sound legitimate, I guess. However, he was just holed up in the property, waiting for people to pull up and then coming out to talk to them. I’m sure he never thought that the prospective tenant would call my office before the scam artist saw them and came outside to talk.”

This month, a law takes effect regarding squatters that makes it a felony for a person to occupy a home without the express consent of the owner.  That means a lease signed by the actual owner.

“As badly as I feel for the tenants who get taken advantage of, this scam is not going to go away any time soon. It’s the responsibility of the tenant to make sure they are renting from the real owner. The only way I can advise them to be fully ensured of that is to only rent homes through licensed property management companies.”

The easiest way to verify ownership is to go online and enter the person’s name and company name.  It’s free. If the person is a legitimate, licensed property manager offering a home for lease, they will be listed as a licensee in good standing with the Nevada Real Estate Division.

Also, the home’s address can be entered into the Clark County assessor site for a search to find the owner of record.

“One thing that I believe has allowed this to become such an issue is that our utility providers do not require much for utilities to be turned on at a property, as far as actual proof that a person has a right to occupy a home,” the realtor said. “My suggestion to our local utilities would be that a notarized document signed by the actual owner of record would be required in order for another person who is not on the deed to get the utilities turned on in their name. A lease is no longer sufficient evidence of a legitimate tenant.”

Keith Lynam, president of the Greater Las Vegas Association of Realtors, said he intends to address the safety issue by working closer with Las Vegas police.

“It’s becoming so prevalent in this town,” Lynam said. “It’s time we start working with Metro. Squatters are one thing. I’m more concerned about bodily harm. (We need to act) before something tragic happens.”

Until that time, Lynam advises prospective renters to use common sense.

“The worst thing is not listening to your instincts and not saying something’s wrong,” Lynam said. “You’ve got to follow your gut. I know that’s not much advice, but your stomach is usually a lot further ahead than your brain.  We have a lot of squatter stuff that is bothersome, but we’re going to start working with Metro to address this (safety) problem.”

It may be somewhat less scary on the cyberfront of rental scams, but it’s certainly as fiscally damaging. And with each new rental snare created on the web, chances become more likely that it will be you and not “the other guy” who gets trapped and taken.

Lynam’s advice on following your gut applies equally to website offers. Many ask prospective renters to send money without having met anyone or having seen the apartment.  But it’s not common to pay a lot of money for something sight-unseen. So, if a landlord expects you to pay a lot before you lease an apartment, it’s a reason to be concerned. Experts say not to rely on promises or photos, but to physically visit any apartment you’re considering renting. According to a warning on Craigslist, not following this one rule accounts for 99 percent of scam attempts.

Here’s what to keep in mind when you’re looking for the perfect rental:

  • The scammer can be a bona fide landlord or, more likely, an impostor.
  • A tenant who’s vacating his apartment might pretend to be the landlord.
  • He might collect fees and security deposits up front. Once the prospects realize they’ve been scammed, the scammer has usually vanished with their money.
  • Using a reputable apartment search website doesn’t mean you can’t get scammed by unscrupulous landlords or people posing as landlords who manage to get their listings onto these sites.

Here are some common scam scenarios to be aware of:

  • The landlord seems too eager to lease the apartment to you. Many landlords want to know your credit score, and they may also want more information about you, such as a criminal background check and employment verification. If a landlord doesn’t seem interested in any form of tenant screening or appears too eager to negotiate the rent and other lease terms with you, it’s suspicious.
  • You’re asked to pay an unusually high security deposit or too many upfront fees. If the landlord wants a higher security deposit than what’s required by law, or if upfront fees seem excessive to you, it could be a sign that the landlord wants to take your money and run.
  • You feel too much sales pressure. If a landlord acts too pushy, it can be a red flag.
  • You’re told you don’t need a lawyer.  It’s true you don’t need a lawyer to review your lease, and generally speaking, it’s in a landlord’s best interest for you to skip lawyer review and just take the rental. But when a landlord makes a point of saying that you don’t need a lawyer, it could be a sign that the landlord is trying to rush you into signing the lease and handing over money, perhaps because he doesn’t really own the building or already leased the apartment to someone else.
  • You’re told you don’t need a lease.  It’s true you don’t need a lease to live in an apartment. Although renting an apartment under a lease is the most typical situation, but a month-to-month rental agreement is fairly common. But only you know what you need. If a landlord tries to get money from you without considering that you might want a lease, think twice. It could be that the “landlord” doesn’t have any lease to show you.
  • The landlord has a convenient excuse for not being able to meet you or show the property. The person behind a listing might say he’s out of the country indefinitely or that he won’t return until after you would need to agree to the rental and pay money.

Some final cautionary advice for prospective renters:

“If it sounds too good to be true, it’s definitely a scam. Period!”

Las Vegas Real Estate Snapshot: June 2015 Statistics

GLVAR Real Estate Statistics, June 2015

 

 

According to the Greater Las Vegas Association of Realtors (GLVAR), June 2015 was a strong month for Las Vegas real estate!

Though the number of available single family residential units and condo/townhouse units decreased, year-over-year, median list price increased just over 14%, for both segments, while average list price increased 13.9% for single family residential units and 7.8% for condo/townhouse units.

The number of available units listed without offers was mixed as single family residential units increased 4.3%, year-over-year, while condo/townhouse units decreased 0.2%.  Median list price of available single family residential units increased 12%, with median list price of available condo/townhouse units increasing 10.7%. Average list price of available units also increased, year-over-year, across both segments.

The number of new single family residential listings increased 11.6%, year-over-year, while units sold increased 14.2%.  In the condo/townhouse market, new listings decreased 2.1%, year-over-year, though there was a 6.3% increase in the number of units sold.

If you are interested in learning more about the Las Vegas real estate market or discussing current real estate opportunities, please contact the Brazill Team.

 

Q1 Offers Mixed Signals for Nevada’s Continuing Foreclosure Problem

The first quarter of 2015 offered mixed signals for Nevada’s foreclosure woes.  Despite a jump in default notices however, there were fewer repossessions compared to Q1 2014.

According to a new report from RealtyTrac, one in every 209 homes statewide received a foreclosure-related filing in the three months ending March 31, the third-highest rate in the nation behind Florida and Maryland.  Creditors started the foreclosure process on 3,070 homes in Nevada, up 166 percent from the same time last year, and 977 homes were seized at the auction block, down 42 percent from a year ago.

Overall, Nevada’s foreclosure rate was up 8 percent from a year earlier, while nationally it fell 8 percent.

RealtyTrac’s report included default notices, scheduled auctions, and bank repossessions.

The Irvine, Calif.-based company cautioned that Nevada’s increased tally actually “may be lower because of improvements in data collection.”

Las Vegas’ foreclosure numbers largely mirrored the state’s — no surprise given the valley has the bulk of Nevada’s population.

Creditors filed 2,239 default notices in the first quarter in Southern Nevada, up 142 percent from a year earlier, and 688 homes were repossessed, down 47 percent, according to RealtyTrac.

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After Years of Delays and Defaults, Southwest Valley Development Rises

Over the last decade, when Las Vegas’ construction industry was white hot, few areas experienced as rapid growth as the southwest valley.

Bolstered by new freeway access and a strong economy, investors flipped land for profit and built subdivisions, strip malls, office buildings, and hospitals, with even more plans for an area that years earlier was largely open desert.   Business then plunged with the recession, all but stalling future growth.

Today, as the economy improves, few places are seeing as much improvement as the southwest valley. Developers are building or planning to construct apartment complexes, industrial properties, big-box retail, and single-family homes around the 215 Beltway between Interstate 15 and Flamingo Road.

Despite the current growth, huge tracts of raw land remain throughout the southwest and much of this land will likely go undeveloped for quite some time.  Additionally, many fear that some investors are piling in too quickly and overbuilding again.

The overall resurgence highlights the steady comeback of a once-battered industry that, for many people, offers visual evidence that Southern Nevada’s sluggish economy is on the mend.

In June 2006, near the height of the real estate bubble, 112,000 people in the Las Vegas area worked in construction. That number plunged 69 percent to 34,800 workers in early 2012, according to the Associated General Contractors of America.  Today, 48,500 people work in construction locally, up 39 percent from the depths of the recession.

“We know the worst is past us, and that gives people confidence,” said Scott Gragson, a land broker and investor.

Projects underway or on the drawing board in the southwest include:

  • IKEA’s 351,000-square-foot furniture superstore, which broke ground April 9 and is slated to open in summer 2016
  • Panattoni Development Co. partner Doug Roberts’ two-building warehouse project, Jones Corporate Park, which is scheduled to break ground this month
  • Australian slot-machine maker Ainsworth Game Technology’s 300,000-square-foot Americas headquarters, poised to open by mid-2016
  • The Molasky Group of Companies’ two-story, 110,000-square-foot industrial building at the UNLV Harry Reid Research and Technology Park, which the company plans to lease to prescription-drug manager Catamaran Corp
  • At least a dozen apartment complexes and thousands of single-family homes.
Developers are drawn to the southwest valley for several reasons:  there is plenty of land, it’s a quick drive to the Strip and to McCarran International Airport, and it’s roughly equidistant from Summerlin and Green Valley, two of the valley’s most popular residential areas.

Rent in several sectors — apartment, office, industrial and retail — typically is higher and vacancy rates are lower in the southwest than in other parts of the valley with lots of land, including the northwest and North Las Vegas.

Moreover, Clark County commissioners in May 2013 voted unanimously to open roughly 3,600 acres, mostly in the southwest, to potential residential and other development. Airplanes, thanks to advanced technology, aren’t as loud as they used to be, so the county agreed to shrink McCarran’s noise contour.

IKEA executives had been eyeing the Las Vegas market for almost 10 years, waiting for the population to pass 2 million, and were “very much focused” on sites along the Beltway with good visibility and access, spokesman Joseph Roth said.

The popular Swedish retailer needed a large site for its megastore. Land ownership in the southwest is fractured heavily, so assembling a big tract can be a headache. The spot IKEA wanted, 26 acres at the southwest corner of South Durango Drive and West Sunset Road, was owned by one investor, and the chain paid a hefty price for it: $21.3 million.

The sale, by M.J. Dean Construction founder Michael Dean, closed in December. IKEA paid $819,328 per acre. Valleywide last year, land investors paid an average $276,422 per acre, according to brokerage firm Colliers International. Roth said the company paid “a fair price” for the property.

Meanwhile, Ainsworth CEO Danny Gladstone decided a few years ago he wanted to build the company’s Americas headquarters near the southeast corner of South Jones Boulevard and West Sunset Road, said Mike Dreitzer, the company’s president of North American operations.

Site work is underway. When finished, the property will have warehouse and manufacturing space, as well as offices for sales, marketing and finance personnel. It’s close to customers and the airport, and just 2 miles east of rival International Game Technology’s campus.

“We think it really is the new center of the gaming equipment manufacturers’ corridor,” Dreitzer said.

For large projects, though, the biggest source of development in the southwest is apartments.

Investors have been buying rental properties throughout Southern Nevada at a fast pace in recent years. The valley’s economic collapse created a big pool of potential renters by wreaking havoc on residents’ finances. Foreclosures, bankruptcies and short sales swept through the region, making it impossible for many people to obtain a mortgage, let alone afford a down payment.

Apartment construction lagged investment sales, but now it’s picking up speed. After opening just 367 units valleywide in 2013, developers completed about 1,700 units last year. As of December, they were projected to open roughly 5,750 units this year and almost 2,000 more in 2016, according to brokerage firm CBRE Group. Among current or planned projects, roughly 50 percent of the new units are in the southwest valley.

But developers may be getting ahead of themselves. They are building faster than demand calls for, RCG Economics principal John Restrepo said.

“It’s a great location, (but) that’s a little too much at one time,” CBRE broker Spencer Ballif added.

Nevada West Partners is the biggest developer in the southwest, with five projects totaling 1,600 units planned or underway. Partner Martin Egbert, whose group has developed apartments in the valley since the late 1980s, said he isn’t concerned investors might be overbuilding and possibly pushing down rental rates. Properties his group opened in recent years — often higher-end residences with lots of amenities — are almost fully occupied and command big prices, he said.

Homeownership rates nationally are at record lows, he said, partly because more people who can afford to buy are choosing to rent instead.

“They’ve seen the swings in real estate prices … and they like the flexibility afforded by being a renter,” Egbert said.

The southwest’s fast-paced growth started around the early 2000s when the Beltway expanded, offering freeway driving instead of dusty back roads. Investors flipped land and built properties, but work ground to a halt when the recession toppled the valley, leaving the southwest a checkerboard of open desert, finished projects and abandoned construction sites.

“Nobody was doing anything,” CBRE broker Greg Tassi said.

Projects got stuck on the drawing board, too, including Station Casinos’ Durango Station resort on Durango Drive just south of the Beltway.

In September 2008, less than two weeks before investment firm Lehman Brothers collapsed, helping to trigger the U.S. financial crisis, Station spokeswoman Lori Nelson said the resort tentatively was scheduled to open in 2011. “The plans are done, they are ready to go, and it will really be contingent on timing based on the economic conditions,” she said at the time.

Today, the land is undeveloped, and a Station sign there advertises plans for a 120,000-square-foot casino with 1,000-room hotel. The sign also warns “No Dumping — No Trespassing.”

Nelson said this month the company has no development timeline for the site.

At the peak of the bubble, land in the southwest valley frequently sold for $1 million an acre. Today, listing prices are a fraction of that but rising, typically ranging from about $300,000 an acre to $700,000 per acre, Gragson said.

One line of business that boomed with the Beltway was home construction. The southwest has been the top submarket in the valley ranked by homes sold for about 10 years, Home Builders Research President Dennis Smith said.

Builders sold 2,016 homes there last year, a third of all new-home sales in Southern Nevada, he said. The second-best market, the northwest, had 1,520 sales.

Perhaps the biggest project in the southwest before the freeway expansion was developer Jim Rhodes’ sprawling Rhodes Ranch community on South Durango Drive at West Windmill Lane.

“It was considered to be out in the middle of nowhere,” Smith said. “But the Beltway changed that.”

Source: http://vegasinc.com/business/real-estate/2015/apr/13/developments-southwest-valley-rise-after-years-del/

Report on Nevada’s Housing Market: Southern Trends

Nevada’s housing market remains in the spotlight of real estate news, with the Southern Nevada market showing some of the strongest levels of consistent growth.

According to a recent report, co‐presented by the Lied Institute for Real Estate Studies at the University of Nevada, Las Vegas and the State of Nevada Department of Business & Industry, all three regions in Nevada saw decreases in both new and existing home sales.

Based on January, 2015 statistics, existing home sales in Nevada decreased by nearly 10 percent and were the lowest they had been since 2008. New home sales decreased by nearly 5 percent, but are still up 3 percent year over year.  The share of homes sold under distress in Nevada increased by 2 percentage points. However, this large increase was a result of the decreased number of home sales, not an increase in REO or short sales. The total number of REO sales remained unchanged in January and short sales saw a 24 percent decrease throughout the month.  Additionally, average new home prices in Nevada continue to increase as Southern Nevada continues to see consistent growth in average new home prices.  At $336,607, average new home prices in Nevada are the highest have been since June 2008.

Here is some additional information about the Southern Nevada housing market:

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Nevada’s Housing Market | January 2015 | Southern Trends

 

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Las Vegas Valley Home Values

The Las Vegas housing market continues to show signs of improvement.  According to a recent report issued by SalesTraq, the median price of homes sold throughout the Las Vegas valley increased in every zip code, year-over-year, 2013-2014.

The following map shows the percentage increase by zip code.  The percentage reflect the change in median price of homes sold during 2014 compared to 2013.

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First Homes are Under Construction in Delayed 1,700-acre Project

www.thebrazillteam.com

Developers of a sprawling, once-foreclosed community have lined up the first builders to put up homes there. The Olympia Companies has sold 80 acres at Skye Canyon — a fraction of the 1,700-acre project site — to Pulte Homes and Woodside Homes.

Though the sales price was not disclosed, and officials did not say how many houses Pulte and Woodside would build, the deal would bring the first homes to the long-delayed project, planned for 9,000 homes in the northwest corner of the Las Vegas Valley.

The community, located between Grand Teton Drive and U.S. 95, is slated to have hiking and biking trails, as well as gambling and other commercial properties. More home builders are expected to join in the development and the first model homes are slated to open next fall.

Skye Canyon is one of several formerly stalled master-planned communities that are coming back to life in Southern Nevada. During the recession, these mini-cities went bankrupt and were either seized through foreclosure or left on the drawing board.

They include 2,200-acre Cadence, in Henderson; 2,700-acre Park Highlands, in North Las Vegas; and 1,900-acre Inspirada, in Henderson.

No one expects a glut of new subdivisions anytime soon, as the projects will be built in phases and aren’t scheduled to be finished for at least a decade.

Developers usually build homes nowadays only after people agree to buy them, as opposed to the boom years when they frequently started construction without buyers lined up.

Nevertheless, the investors are gearing up as the valley’s homebuilding market, after recovering from the depths of the recession, slows considerably this year.

Southern Nevada builders sold about 4,850 new homes this year through October, down 22 percent from the same period last year, according to Las Vegas-based Home Builders Research. The median price of October’s closings was $287,588, up about 1 percent year-over-year.

A consortium of developers bought the Skye Canyon site for $510 million in 2005 at a federal auction. But before they built anything, the former Wachovia Bank foreclosed on the property in fall 2008, less than two weeks after Lehman Brothers Holdings went bankrupt and helped set off the national financial crisis.

Skye Canyon is now owned by Las Vegas-based Olympia, which developed the high-end Southern Highlands community, and New York investment firms Stonehill Capital Management and Spectrum Group Management. They bought the site at a steep discount.

Source: http://vegasinc.com/business/real-estate/2014/dec/11/delayed-project-get-first-homes/

Las Vegas Real Estate Market Snapshot | 2014

 

www.thebrazillteam.com

While Southern Nevada’s economy has not reached the dizzying heights of the boom, it does seem to have safely left the bust behind! In fact, we think it’s safe to say the Great Recession appears to be officially over and the initial phases of recovery and stabilization are well underway, both in our overall economic position and our local real estate market. Is the Valley poised to grow anew?

Moderate growth continues unabated and is expected to continue into 2015. Between 2010 and 2013, new home sales increased 37.6 percent, out-of-state drivers licenses turned in to the DMV increased 28.6 percent, taxable sales increased 18.4 percent, and gaming revenue increased 8.6 percent. Though 2014 has shown some deterioration in terms of new home sales and in-migration into the area, taxable sales improved. Employment also increased 3 percent from July 2013 to July 2014.

These economic improvements have translated into improvements in our local real estate market. Occupancy in commercial real estate projects has increased by three percentage points to 2.9 percent and we are seeing growth in other sectors as well.

Las Vegas Industrial Market

The first half of 2014 looked promising for Southern Nevada’s industrial market, racking up over 2 million square feet of net absorption and knocking industrial vacancy below 10 percent for the first time since 2008. The question then was whether we could expect similar numbers in the second half of the year. If the third quarter of 2014 is any indication, the answer is maybe.

Net absorption in the third quarter of 2014 was 635,780 square feet, roughly equal to net absorption in the first quarter of 2014, and occurring in concert with only 14,248 square feet of new completions, far less completions than in the first quarter. Strong net absorption in speculative projects is a sign of sustainable recovery, and important given that speculative construction will likely loom larger in 2015 than in the past five years. Industrial vacancy decreased to 9.2 percent, two percentage points lower than one year ago. The weighted average asking rental rate increased to $0.55 per square foot (psf) on a triple net (NNN) basis, $0.04 cents higher than one year ago.

Las Vegas Office Market

Every year, Southern Nevada’s office market begins a new recovery, and every year it comes up just a little short in the end. Though the office market recovery has not been pretty, it is a recovery of sorts.

In the third quarter of 2014, net absorption decreased to 44,964 square feet from almost one half-million in the second quarter of 2014 and the third quarter of 2013. New completions were slightly higher, at 12,000 square feet. Vacancy rates managed to decrease to 19.3 percent from 19.4 percent in the second quarter of 2014. Asking rates remained in neutral, ringing in at $1.87 per square foot (psf) on a Full Service Gross (FSG) basis.

Las Vegas Retail Market

The second quarter of 2014 saw the retail market turn around and post positive net absorption after two quarters of negative net absorption. The third quarter of 2014 continued the positive trend, with net absorption staying just one step ahead of new completions; a good performance, but not a great performance.

Net absorption in the third quarter was 242,296 square feet, slightly higher than in the second quarter of 2014, and more than double net absorption in the third quarter of 2013. New completions also increased quarter-over-quarter and year-over-year, with a 220,000 square foot power center added to inventory this quarter. Retail vacancy decreased by 0.1 percentage points to 9.0 percent, while the average asking rental rate increased to $1.31 per square foot (psf) on a triple net (NNN) basis.

Las Vegas Medical Office Market

When we write that Southern Nevada’s medical office has gone from bad to worse, we feel as though we must be repeating ourselves. In fact, a pattern of positive net absorption for one or two quarters followed by one or two quarters of negative net absorption is emerging in the medical office market, creating a sense of running in place.

Net absorption in the third quarter of 2014 was negative 104,034 square feet, sending medical office vacancy up to 18.7 percent. Asking lease rates remained stable at $2.15 per square foot (PSF) on a full service gross (FSG) basis.

Las Vegas Land Market

Total sales volume for land in Southern Nevada remains well below the levels seen in 2007, but the market has recovered dramatically since the years of the Great Recession. The number of acres sold in the first three quarters of 2014 is higher than in the first three quarters of 2013, with 1,889 acres trading so far this year compared to 1,455 acres trading in 2013. Sales volume was higher than in 2013 in the first three quarters of the year, and naturally this means that the price per square foot of land is also higher. In 2007, land was selling, on average, for $22.93 per square foot (psf). After the market collapsed in 2008, land prices reached a low of $4.41 psf in 2012. In the third quarter of 2014, the average price for land stood at $7.61. This increase in land prices is indicative of the greater interest developers and investors are showing in the Valley’s land market.

Las Vegas Hotel & Hospitality Market

Southern Nevada’s hospitality market continued to improve through the second quarter of 2014. Average annual room occupancy, for example, jumped from 87.0 percent to 89.5 percent, and the average annual ADR (average daily room rate) dropped slightly from $121.73 to $119.75. This brought revenue per available room (RevPAR) up to $104.61 from $101.77. In 2014, RevPAR is now almost $10 higher than it was in 2013, a significant leap (though not as significant as the $15 leap between 2010 and 2011). This suggests that Las Vegas has largely recovered from the Great Recession, just in time for new expansions of the Valley’s room inventory.

Las Vegas Multifamily Market

According to statistics provided by REIS, multifamily vacancy in Southern Nevada decreased in the second quarter of 2014 (the most recent quarter of available data), extending a three year long streak. Vacancy stood at 5.5 percent in the second quarter, 0.4 percentage points lower than one year ago, and 0.2 percentage points lower than in the first quarter of 2014. Class A properties were 5.7 percent vacant in the second quarter, the same as in the first quarter of 2014. Class B/C properties were 5.3 percent vacant, 0.5 points lower than in the first quarter of 2014.

To learn more about the current state of Las Vegas’ real estate market, or to discuss real estate opportunities, please contact us or call Antone Brazill at 702.434.0091.

Pricey, Resort-Like Options Increasing for Las Vegas Renters

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Resort living options abound for Las Vegas renters!

Despite the still-sluggish economy, investors are building a burst of higher-end rental complexes with larger units, lots of amenities, and much higher prices. These rental properties, designed to feel like boutique resorts, are popping up throughout the Las Vegas suburbs.

For example, The Domain apartment complex has quartz counter tops, a digital fireplace in the lobby that emits heat, free yoga classes and massages and 50-inch flat-screen TVs in each unit. When completed, The Somerset Hills complex will have a sand volleyball court and dog park. A poolside cabana — dubbed the Cave — will have flat-screen TVs and Xbox gaming systems. And, Elysian at the District will feature an outdoor movie theater, a pet spa, billiards and arcade room, tanning salon, massage and facial room and, in the units, stainless steel appliances and built-in speakers.

Other options include the Lennox, whose units range from about 850 to 1,800 square feet and cost $1,300 to $2,800 per month. The Gramercy, formerly called Manhattan West, is scheduled to open Jan. 15 and has apartments ranging from 530 to almost 2,100 square feet. Rents will be from $950 to $3,500 per month.

While Domain’s monthly rents are between $895 and $1,445, Elysian, opening in mid-January, will likely charge up to $2,500 per month or more. Vantage, in Henderson, is charging more than $4,000 a month for its largest units. By comparison, according to Colliers International, the average asking rent for a Southern Nevada apartment is $866 a month.

Though these high-end rental projects would almost be assured of filling up in wealthier, more established cities, Las Vegas wages have dropped hard since the recession and many people likely can’t afford the properties. Furthermore, most residents seem to prefer single-family homes. A such, it’s unclear how many people will want — and be able to afford — to live in these complexes and whether too many developers are chasing a small number of customers.

“No one knows,” said broker Patrick Sauter, managing partner of NAI Vegas.

The economy is slowly improving, but “I think there are significant risks that there are more projects than there are renters,” said Daniel Grimm, developer of Somerset Hills.

At the very least, investors are bringing a dash of style to a market packed with no-frills rental properties. Over the years, suburban developers have provided such perks as fitness centers and small movie theaters, but they’re in new territory with the abundance and quality of amenities, not to mention the prices.

“This is a whole other animal,” said broker Garry Cuff, a vice president with Colliers.

The apartment business is gaining speed nationally and, though far from roaring, is arguably the best-performing aspect of Las Vegas’ commercial real estate market. Investors have been snapping up local properties the past few years — often at heavily reduced prices from the boom years — and building new ones.

They’re lured in no small part by the recession’s after-effects. Many residents, stung by bankruptcies, foreclosures and short sales, can’t get mortgages and have to rent.

Investors acquired roughly 11,700 units, at an average price of $65,000 each, this year through the third quarter, compared to 3,000 units at $42,500 each for all of 2010, according to Colliers. Vacancy rates have dropped from a peak of 11 percent in 2009 to 5.5 percent today, Colliers says.

Developers have opened about 3,500 units a year since 1999, according to CBRE Group. Construction dried up during the recession but is picking up again.

After opening just 367 units last year, investors have completed 1,700 units this year. They are projected to open roughly 5,750 in 2015 and almost 2,000 in 2016, according to CBRE. Development is almost entirely concentrated in the south valley, especially near the 215 Beltway in southwest Las Vegas and the Beltway-U.S. 95 interchange in Henderson, CBRE found.

Land prices and construction costs are rising, so making a profit on a development requires higher rents, and the only way to persuade tenants to pay that much is to throw in more amenities, said Grimm, the Somerset developer.

Moreover, rental rates plunged during the recession, said Domain developer Martin Egbert, who hopes that more amenities will push prices back up.

Egbert’s group, Nevada West Partners, perhaps the biggest high-end developer today, has built a few dozen rental properties in the valley since the late 1980s, though never with the level of amenities as now.

They bought land cheap during the recession, picking up 15 development sites in recent years, and want more.

Still, if developers can’t find enough renters, they likely won’t blight neighborhoods with ghost-town properties. They can just slash rents to lure tenants from cheaper buildings who would jump at the chance for affordable, luxury-style living.

That would empty out the lower-end complexes, though. This chain effect happened during the recession when landlords cut prices to keep buildings filled, said Bob Weidauer, CEO of WestCorp Management Group, a property management firm.

Developers such as Egbert are not targeting the masses. They want people with well-paying jobs who can buy a house but choose not to, people who want to live in a fun atmosphere and don’t want to mow the lawn or wait around for the repair guy.

Many such renters are likely young and single or newly married, perhaps wary of the financial havoc that homeownership caused in recent years. But they might also include retirees or empty-nest baby boomers who don’t want to deal with a house anymore.

“I don’t think that population is (big), but I do believe it exists,” said Cuff, of Colliers.

Initial results are promising.

Domain, at Eastern Avenue and Coronado Center Drive in Henderson, opened in January. Just one of its 308 units is vacant.

Dwell, also by Egbert’s group, is on Silverado Ranch Boulevard near Bermuda Road and has 376 units. It opened in April and is 90 percent leased, according to management. Prices are $50 a month less than Domain’s.

Elysian at Southern Highlands opened a year ago with 255 two-story townhouses with garages and is 96 percent occupied, according to developer Cohen, co-founder of the Calida Group.

Calida has new projects at the District at Green Valley Ranch and at Downtown Summerlin. As Cohen sees it, he can charge higher rents by building near retail centers, restaurants and freeway on-ramps, and by offering a lot of on-site amenities.

“We felt like people would pay a premium for that,” Cohen said.

Still, people can only pay so much.

The 110-unit Vantage, a stylish, formerly busted condo project, is apparently charging more than anyone.

Amenities include concierge services, spa, pet park and poolside cabanas, as well as gourmet kitchens and floor-to-ceiling window walls. Available units range from about 1,900 to 3,100 square feet.

It’s unclear how many renters have signed on — efforts to get comment from the landlord, Texas-based Pinnacle, were unsuccessful — but with prices now between $2,645 and $4,395 a month, most people in the valley can probably only dream of affording to live there.

“At some number, it doesn’t make sense,” Grimm said.

Source: http://vegasinc.com/business/real-estate/2014/dec/11/las-vegas-renters-pricey-resort–options-increasin/