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IN BUSINESS COMMERCIAL REAL ESTATE Recovery May Be Two Steps Forward, One Back By Buck Wargostaff writer Commercial vacancy rates increased in the fi rst quarter in a continued sign that local businesses remain too weak to grow and out-of-state companies aren’t moving into the market in large numbers. Colliers International Las Vegas reported that the offi ce, industrial and retail vacancy rates rose by the end of March just as they had during the fourth quarter of 2010. Commercial vacancy rates, especially the offi ce sector, had shown some improvement during the third quarter of 2010, but that positive news now appears to be short - lived. “I think some people jumped the gun when they saw some improvement,” said commercial analyst John Restrepo, principal of Restrepo Consulting. “It has to be sustained for several quarters. We’re fi nding out the nature of this recovery will be two steps forward for one back.” Colliers recently reported the industrial vacancy rate was 15.8 percent in the fi rst quarter, up from 15.7 percent in the fourth quarter and 14.5 percent in the fi rst quarter of last year. In the Las Vegas retail market, the vacancy rate was 11.5 percent , up from 10.6 percent in the fourth quarter and 9.7 percent in the fi rst quarter of 2010 —that’s a nearly 20 percent increase . The offi ce vacancy rate stood at 24.8 percent at the end of the fi rst quarter, up from 24.1 percent in December and 22.7 percent in the fi rst quarter of 2010 . “As it stands, Southern Nevada needs an infusion of investment from outside the valley because waiting on the hospitality market to pull us out of recession by itself will take a long time,” said John Stater, Collier s’ Las Vegas research manager. Stater said 2011 promises to be much like 2010, but there’s hope a stronger national job market and consumer spending will provide some relief in 2012. Other fi rms will release their numbers this month that should paint an even more detailed picture. Restrepo said the valley’s commercial markets will continue to bump along the bottom until there’s signifi cant job growth. That will only come when the national and local recoveries strengthen suffi ciently to produce jobs at the historical rates. The region’s economic development efforts for the past 20 years hinged on the business climate in California getting so bad that companies would fl ock to Nevada in large numbers. They have gone to Arizona and Utah instead, he said. Companies either move or expand to other markets based on a variety of factors, including access to markets, quality of the workforce, community image and in the area’s education quality, Restrepo said. Rarely, if ever, is the tax structure a driving reason, he said. “That has ultimately proved to be ineffective, and the fl aws in the strategy were exposed by the Great Recession, when we looked around and saw that the Las Vegas economy was not much more diversifi ed today than it was 20 years ago,” Restrepo said. “If that strategy had worked, we wouldn’t have the highest unemployment rate in the country.” SHORT LIST BIXBY LANDS IN LAS VEGAS Orange County-based Bixby Land Co. has acquired two industrial properties in the Las Vegas Valley— a 129,000-square-foot building at 7600 Eastgate Road in Henderson for $8.25 million , and a 220,000-square-foot building at 4335 Arcata Way in North Las Vegas. FORMER NLV MAYOR GETS NEW GIG Voit Real Estate Service has named former North Las Vegas Mayor Mike Montandon as managing director of operations in Las Vegas. He’ll oversee commercial real estate services on behalf of area investors, banks, fi nancial institutions and special servicers for which Voit is surrogate owner of their distressed assets. | 4 APRIL 2011 | 13