The other shoe was bound to drop. Plummeting real estate prices in Las Vegas aren’t limited just to the residential market:
Foreclosure problems that destroyed residential real estate in 2008 are set to hit the commercial real estate market even harder this year, analysts are warning.
Commercial property values have fallen 30 percent to 40 percent from their peak a couple of years ago and the market is fraught with peril. Loan defaults have soared. Financing has dried up. Rising vacancy rates combined with declining rents are weakening cash flow.
"For Lease" signs hang at almost every shopping center and office park around the Las Vegas Valley. Construction has been delayed or halted on some of the newer developments.
"The problem is banks and lenders were so loose in making construction loans," said Hank Gordon, principal of Laurich Properties, a retail developer in Las Vegas. "There was no need to build all these strip centers one after another along Rainbow (Boulevard), to pay $20, $30 and $40 a square foot for land and think rents will go up to warrant it and sucker a bank into making a construction loan when demand wasn’t there."
Are you looking for a good investment in a troubled economy? Consider red ink. Lenders are going to need a lot of it.
Yea, it’s looking pretty ragged.
There are so many signs up and down main streets that the common eye doesn’t even notice. I’ve been here a couple years and am not yet braindead so I see all the “For Lease” and “For Rent” signs, and all the vacancies.
The main things, of course, are still intact.
Happy Hour with the parade of new breast implants and new puffy lips – now that still continues. 3PM is Happy Hour in the Red Rock area for the regulars and the parade of new body parts is a real crack up. My husband nearly breaks his neck.
Karma has a funny way of dealing with certain elements. Couldn’t happen to a more deserving group of prix.
My observations of late have been:
1) Builders are still completing office parks and strip malls. Then they sit vacant and are still vacant. The builder won’t get paid unless he completes the project. Then it’s the noteholder’s problem. Default. Now it’s the Bank’s problem.
2) Realtors are STILL touting a housing recovery. Don’t these bottomfeeders have any remorse for putting people into homes they could not afford? Wishful thinking I guess. They only care if a transaction takes place.
3) You would never know there was a recession on the strip. But the local casinos are ghost establishments. On Saturday night, July 4th, there was NOBODY in the buffet at a local casino. Nobody has any disposible income left after watching their equity vanish.
4) The house I’m renting went from $386,000 in June 2006 to $224,000 in June 2009. The landlord’s mortgage is $350,000. Oh snap.