Buying Commercial Real Estate in Las Vegas
Commercial real estate in Las Vegas is most often purchased as an investment. With the "Recession of 2008 -2009" negatively affecting employment and the general economic conditions within Nevada, buyers must be diligent when placing their scarce cash into commercial properties. The commercial market usually follows the downward trend established in the residential market, but with a significant lag time. Thus, the commercial market is just beginning to feel the effects of increasing unemployment. tight credit, the lack of in-migration and generally slowed market activity. Commercial brokers expect 2009 to be the worst year that they have seen in the last decade.
Having talked about the negatives, one must always keep in mind the fact that some people will benefit from the falling market conditions. If you have cash, or you can secure a loan, you may be able to take advantage of a situation not often seen in Las Vegas, a period of falling commercial property prices.
The value of a commercial property is tied to its income stream. If you have excellent tenants, like the U.S. Government, Fortune 500 Corporations or a group of financially strong tenants, then the affects of the current downturns may be relatively nominal. For buyers, paying attention to the commercial tenants within a building is of paramount concern. Even tenants that were "gold-plated" when times were good and provided owners personal guarantees may fail in the current environment.
Serious commercial buyers need to spend time investigating just how strong existing tenants are before they buy. Consider the terms of current leases, and the likelihood of vacancy if the term is short. 2009 is no time to start hunting for strong replacement tenants to support your commercial investment, if you are buying, make sure the tenants in place are strong.
If you are going to be an owner / user, then the concerns about tenants goes away. It is just a matter of finding the best deal, and that is all about comparison shopping and bargaining. As an example, industrial properties in Las Vegas range in price from about $ 80 per square foot to $ 250 per square foot. If you shop and bargain you can usually get a great deal of building for your money, and that will likely be the case in the 2009 market. Find a buyer's representative who will give you all of the information on the market and help you sort through it.
Copyright 2008, Glenn Rigdon, Horizon Village Realty
|
|
