Las Vegas sale a cause for optimism

Las Vegas' commercial market has seen big improvements this year.

The Sin City real estate market – both commercial and residential – has been struggling more than most markets since the economy crashed years ago. However things there are revving up, and a recent commercial sale shows that if investors and other buyers put effort and time into new purchases, the market will soon return to healthy levels.

According to the Nevada Business Journal, Sundance Plaza in Las Vegas recently was purchased by Gatski Commercial Real Estate Services for $5.73 million. The company's team then took time to improve landscaping, tenant signage and other markers to make the center more visible to potential tenants and customers. Gatski Commercial also cut move-in costs as a way to attract new businesses.

"This is exactly the kind of effort that's needed to turn around a troubled asset," Jeremy Foley, a senior associate at Gatski who helped lease and negotiate the sale, said to the business journal. "This situation is a win-win. The seller realizes a profit and the buyer picks up an asset with strong cashflow."

Continued growth
Although the property was sold for much less than its 2002 value of $10 million, its sale has been a source of optimism for the market, with the journal calling it "a poster child for the boom, the burn and rebuilding of the Las Vegas commercial real estate market over the past decade."

The sales price also was nearly twice what it was assessed at in 2011. Sundance Plaza is now 90 percent occupied, with some big names including PTs, State Farm and IQ Technologies.

In May, Nevada Business Journal reported that the city's commercial real estate market will continue to see improvements this year. Its industrial net absorption in the first quarter of this year experienced a year-over-year boost of more than 1 million square feet. The city also added 129,000 square feet of completed industrial space – an astonishing increase over 2012's number: Zero.

"Employment continues to be weaker than we would like, especially in the construction sector, but many measures of the local economy appear to be on the mend, and that gives us hope that 2013 will not only be a stronger year than 2012, but stronger or at least as strong as 2011," said John Stater, research director for Colliers International – Las Vegas.

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