Nevadan at Work: Carson City ties led to commercial real estate career

Farm living wasn’t the life for Charles Van Geel.

Van Geel, who grew up on ranches in Winnemucca and Fallon, knew he wanted a different career path. What that path would be wasn’t clear until Van Geel began working as a page in the Nevada Legislature in the 1980s and ’90s.

The connections he made in Carson City charted Van Geel’s course toward development of commercial real estate. His first job was with economic-development nonprofit Nevada Development Authority, now the Las Vegas Global Economic Alliance. Within months, developer American Nevada Co. lured Van Geel away. He’s been with American Nevada ever since, riding the ups and downs of Southern Nevada’s real estate roller coaster.

In January, Van Geel also took over as president of NAIOP Southern Nevada, a trade group that represents building and real estate trades.

Question: Why weren’t you interested in ranching?

Answer: I grew up in a small town, but I really enjoyed the energy and diversity of big cities. The red carpet wasn’t rolled up at 5 every night. I had wonderful parents, but as I grew up on the ranch, getting up early to feed chickens and pigs, I just didn’t feel that owning a ranch or farm was in my blood. I wanted to do something different.

Question: You got into commercial real estate in 1999. When during the boom in 2005 and 2006 did you think things had become a little too crazy?

Answer: We had several management meetings where we realized things weren’t making sense. A lot of the people we were doing business with forgot the basics. We found ourselves questioning the decision-making of tenants, other developers and even ourselves. Should we push the envelope? Tenants were flush with cash, and developers were getting them to pay for things that were traditionally a landlord expense, like the HVAC units serving their spaces.

We found ourselves refinancing projects at the peak of the market when rents were highest, not thinking the recession would hit us as hard as it did. A couple of years later, we were saying, “Wow, we might have to give back The District (at Green Valley Ranch).”

Question: When did it feel like the world was ending?

Answer: The moment we started seeing the dominoes fall was in 2008. I was watching a movie outside in the park next to Whole Foods (in Green Valley Ranch). All of a sudden, behind me, a bunch of lights came on in the third floor of one of our office buildings.

After the movie, I walked to the building’s main entrance because I was curious to see why Silver State Bank’s space was suddenly illuminated. Someone with the bank was standing outside. I asked what was going on. He said, “We’re being shut down by the FDIC.” That was when I thought, “Uh oh.”

From there, almost every one of our mortgage companies (tenants) lost their line of credit and went out of business. We lost all but two homebuilder tenants, and nearly every architecture studio and engineering firm.

Over 25 percent of our portfolio was real estate-related. Tenants we weren’t losing were calling us and saying, “Please reduce my rent. It’s the only way I’ll survive.”

Everyone was in survival mode. We had to figure out who we could help, and if they’d be around so that we could heal together.

By 2012, we were starting to heal. Then, our biggest tenant, Zappos, announced it was moving to downtown Las Vegas. Fortunately, we had two years to backfill their three buildings and 150,000 square feet of space. When Barclaycard committed (in 2013) to taking two of the buildings, we felt things were finally getting back to normal. We were starting to see rent growth, and our vacancy rates were dropping.

Question: What has been American Nevada’s recovery strategy?

Answer: We’ve gone back to the basics. We’re much more selective about who we want in our portfolio, and our underwriting is much more thorough. In our decision-making, we’re cautious.

Question: What issues are you emphasizing as president of NAIOP?

Answer: One of my focal points is membership. I want our members to see a return on their investment. I have reached out to all of our President’s Circle sponsors to thank them for their investment, and I have promised them I will demonstrate their return on investment.

One of those returns on investment is our lobbyist in Carson City. We have government affairs people to work with members. I’ve also been promoting access to information, workshops and networking opportunities. If members get involved, they’re going to see a tremendous return.

Question: What are the biggest issues your membership faces?

Answer: On the general-contracting side, there’s a lack of skilled workers. A lot of our members are in hiring mode, but the amount of skilled labor here is a bit deficient.

Legislatively, we are devoting attention to a number of issues. The governor’s business license fee is of concern, and though we are completely supportive of his education initiatives, we’re asking if the money from the collection of the fee would really be earmarked for education. The bill wasn’t quite drafted in that manner. We also want to make sure the formulas the license fee would use are fair and that we understand the logic behind them. We just need more transparency.

Another bill very concerning to us is the mechanics’ lien legislation, Senate Bill 375. The bill asks that funds for building be placed into an escrow account, subject to both parties agreeing on the release. Any dispute could delay the tenant taking space. That could cripple our industry.

Land use is huge for us. As cities annex (Bureau of Land Management) land, we want to make sure some of that land is earmarked for commercial development. Industrial developers in particular can’t compete with the homebuilding industry.