Investor still pursues distressed Las Vegas real estate

After the real estate market crashed last decade, investors swooped in for the leftovers. They bought cheap houses in bulk to turn into rentals and snapped up abandoned projects at steep discounts.

The bargain hunters included Ofir Hagay, who, with partners, bought partially built projects in Las Vegas, finished construction and signed tenants.

Today, beat-up, discounted properties are largely gone from the valley, but Hagay is still going after distressed real estate.

The 52-year-old Israeli native bought two office buildings out of bankruptcy in September for $24.8 million, property records show. He acquired the buildings, 8912 and 8918 Spanish Ridge Ave., in the southwest valley, through a new fund at his firm Moonwater Capital. (Las Vegas Review-Journal)

According to listing brokerage Sun Commercial Real Estate, 8912 Spanish Ridge, a three-story, 71,000 square-foot building, was fully occupied at the time of sale, and 8918, a two-story, 41,400-square-foot building, was 50 percent occupied.

Tenants include builder Harmony Homes, Meadows Bank and advertising firm SK+G, whose founders owned the buildings but pushed them into bankruptcy this year when their mortgage came due.

Las Vegas’ office market is still wobbly from the recession. But Hagay’s purchase comes amid a rising tally of office-building sales, reversing a recent slide, and stronger-than-average demand for space in the southwest valley.

The Spanish Ridge buildings were Hagay’s first purchase through his new fund, he said, and he has another half-dozen or so deals in the pipeline.

And his background is, to say the least, a bit different than other developers’.

Israel, Africa, Bulgaria, Las Vegas

As he tells it, he was born in Jerusalem but, while in the Israeli military, broke his neck in a training exercise, blocking him from becoming a combat officer. He moved to Freetown, Sierra Leone, at age 22 and worked for a company that, among other things, imported rice and exported diamonds and other commodities.

While in Israel for his father’s funeral, a coup hit Sierra Leone. Hagay says he lost everything and didn’t go back.

He eventually moved to Bulgaria, spending 10 years there before arriving in Las Vegas in 2003.

Hagay did condo conversions here, or buy apartment-rental buildings and then sell the units. But the economy crashed, and Las Vegas became flooded with abandoned, underwater and bank-owned properties.

Hagay formed WGH Partners with investors Michael Werner and Benjy Garfinkle. Among other deals, they teamed with The Krausz Cos. of San Francisco to buy and finish ManhattanWest, a mothballed mixed-use project on Russell Road just west of the 215 Beltway. They renamed it The Gramercy, completed construction and filled it with office tenants, eateries and apartment renters.

They sold The Gramercy’s two office and retail buildings this year for almost $62 million, three times what they paid for all of ManhattanWest in 2013.

Mortgage comes due

The Spanish Ridge buildings may have gone bankrupt, but they’re open and operational, not abandoned and unfinished like some of Hagay’s other purchases.

He bought the office buildings from SK+G founders Jerry Kramer and John Schadler, who filed Chapter 11 protection for the properties in March, records show.

In a court filing, Kramer said the ownership filed the case because the balance of their mortgage on the buildings was “due and owing.”

In a recent interview, Kramer said his group was never late with its mortgage payments. But refinancing the debt would have required them to make a cash payment of $5 million to $6 million, and they “weren’t willing to commit that kind of money,” he said.

He said his group was “hoping to be able to work it out” by filing Chapter 11, but Hagay came along and “made an offer that made everybody whole.”

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

ad-high_impact_4
Business
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
President Trump’s tariffs could raise costs for real estate developers, analysts say
President Donald Trump made his fortune in real estate, but by slapping tariffs on imports from close allies, developers in Las Vegas and other cities could get hit hard.
Las Vegas business and tariffs
Barry Yost, co-owner of Precision Tube Laser, LLC, places a metal pipe into the TruLaser Tube 5000 laser cutting machine on Wednesday, June 20, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Nevada Film Office Connects Businesses To Producers
The director of the Nevada Film Office discusses its revamped locations database and how it will affect local businesses. (Bailey Schulz/Las Vegas Review-Journal)
Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like