Empty storefronts may mean bargains

The fastest-growing U.S. city of the 20th century is turning into a ghost town or so it’s being depicted by reports of Las Vegas leading the nation in home foreclosures, thousands of people leaving town after losing jobs and commercial vacancies soaring

Tenants are bailing out of shopping centers and office parks like Oklahomans fleeing the Dust Bowl, sometimes vacating the premises overnight.

Mervyn’s went out of business, leaving an 87,000-square-foot department store available for lease on busy Decatur Boulevard next to the Meadows mall.

Rite Aid abandoned all its drugstores in Las Vegas, enabling grocer Fresh & Easy to enter the market with convenient corner locations.

Hispanic and discount grocers moved into supermarkets closed by Albertsons, Smith’s and Vons.

As bad as it’s getting in Las Vegas commercial real estate, opportunity exists for business owners to seize a prime location, often at a fraction of the previous rent.

Rainbow Boulevard is lined with banners and signs advertising office space for lease, from 300-square-foot executive suites to 6,000-square-foot corporate offices.

Craig Road, once booming with big-box and chain retail development, has similar signs hanging at half-empty shopping centers that were built during a period of rampant growth in North Las Vegas.

A third-quarter report from Colliers International in Las Vegas showed office vacancy at 22 percent, retail vacancy at 8.6 percent and industrial vacancy at 13.3 percent, all near 20-year highs.

Commercial property owners and managers are being more resourceful than ever in their quest to fill empty space in hard-hit areas. They’re allowing more short-term leases and giving concessions on rent.

“I’m really having to dig into my bag of tricks and be as creative as we can,” said Terri Sturm, chief executive officer of Las Vegas-based retail developer Territory Inc. “I’m giving away free rent, something we never did. We’re looking at shorter leases. We never looked at anything less than five years.”

Even with reduced rents and other incentives, tenants are reluctant to sign long-term leases because of economic uncertainty. With a plethora of vacant buildings, they can be more selective and drive a hard bargain, CB Richard Ellis retail broker Zack Hussain said.

Still, landlords are getting premium rates — from $2.75 to $3 a square foot — for good spots such as corner locations in densely populated, established areas, he said. CB Richard Ellis reported asking lease rates of $1.82 a square foot for retail in the third quarter.

Nelson Tressler of Grubb & Ellis negotiated a three-year, $90,000 lease on a 1,200-square-foot building for Harold’s Chicken Shack, about $2 a square foot.

It’s not an “A-plus” location, Tressler said. It’s in an unanchored center, but it’s got good visibility on Rainbow Boulevard and the tenant is taking over space previously rented by Jersey Mike’s sub shop, so all of the kitchen fixtures, plumbing and ventilation are already in place.

“Right now, there are very few tenants out there looking and there are shopping centers with turnover and vacancy at 10 percent,” Tressler said. “It’s a huge opportunity for somebody who wants to roll the dice and get into space they couldn’t get into before, especially ma-and-pa types.”

That would be Doggie District Pet Resort, a canine day-care center owned by 30-year-old Las Vegas native Austin Lewis. He needed C-2 zoning and a special-use permit to build out 6,000 square feet at a shopping center at Flamingo Road and Rainbow, including a fenced yard.

In a good market, the landlord wouldn’t have waited two months for the permit process to lease space that’s not optimal use, Tressler said. At the market’s peak, from 2005 to 2007, new centers were preleased before they were completed and getting $3 to $3.50 a square foot, he said.

David Zacharia of DZ Realty said he has an “incredible” special for 24-foot-by-80-foot in-line space at Rainbow Robindale Plaza, about a mile south of the Las Vegas Beltway. Rent is $1.25 a square foot rent, far below the asking market rate, he said.

A Dairy Queen is coming to the corner with its new “Chill Grill” concept and the area is surrounded by dense housing inhabited by relatively high-income people.

Commercial space has to be broken down by categories to identify good deals, Zacharia said.

Freestanding buildings in unfinished “gray shell” condition with drive-throughs would start around $2.50 a square foot with a few months’ free rent and about $25 a square foot in tenant improvement allowance, or the cost to build the space to the tenant’s specifications.

In-line space, or stores that share common walls in anchored shopping centers, would start at around $1.50 a square foot with free rent and tenant improvement allowance. Rent drops to $1.25 a foot in shopping centers with no major anchor.

Second-generation anchor tenant space of 15,000 to 50,000 square feet goes for $1 a square foot, again with rent concessions.

Jordan Schnitzer, president of Portland, Ore.-based Harsch Investment Properties, said everyone experienced downward pressure on rents during the first part of the year. He’s convinced there was some sort of directive from the top of every company to seek rent relief, even if the leases were signed a just year ago.

In markets such as Las Vegas, where affordable land prices led to runaway development, commercial landlords push for occupancy at the expense of rental rates, Schnitzer said. The question is how to offer value to tenants without causing rates to cascade.

“It takes a whole lot of creativity,” he said. “We can’t manufacture tenants, but we can help existing tenants. Say we’ve got 30,000 or 40,000 or 50,000 feet next to you that’s empty. If you can use that space, you might want to expand and add an employee or two or three, we’ll work with you on the rent. We’ll take a gamble with them.”

The Las Vegas metropolitan statistical area still has 2 million in population and about 37 million visitors a year, so there’s some demand on the industrial side for bulk distribution space, said Rod Martin, vice president for Majestic Realty.

The cheapest rent — 52 cents a square foot — is found in North Las Vegas, a submarket with 11.2 percent vacancy on 29 million square feet of industrial buildings, CB Richard Ellis reported.

Although Majestic has retained about 90 percent of its existing tenants, there’s no new demand, Martin said. Majestic completed two deals last year, compared with about 30 in a normal year, he said.

Commercial property values in Las Vegas have plummeted and cash flow has slowed to a trickle, putting many developments on life support. Nevada Title Co. reported a sharp increase in commercial mortgage defaults this year.

Kevin Higgins of Voit Commercial said he saw a lot of “midnight moves” this year, companies that went bankrupt and packed up and left in the middle of the night. It will get worse before it gets better, he said.

Although most economists are pointing to signs of recovery in the national economy, the recession continues unabated in Southern Nevada, Colliers research analyst John Stater said.

“When we see visitor volume and gaming revenue begin to climb, we’ll know that economic recovery is on its way to Southern Nevada,” he said.

Some analysts say Las Vegas has crapped out, building too many new homes, too many casinos and far too much commercial space. The next wave of foreclosures is coming in commercial real estate, where $3.5 trillion in loans are in trouble nationwide, Whitney Tilson of New York investment firm T2 Partners said.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.

Casinos to be penalized for allowing drug-impaired customers to gamble
Nevada Gaming Commission Chairman Tony Alamo talks about an amendment making casinos subject to the same disciplinary standards of preventing people to gamble if impaired by drugs as they are for letting them play while intoxicated by alcohol.
Terrible Herbst to open large travel center in Southern Nevada
The 50,000-square-foot commercial travel center will include 96 fuel pumps and the third White Castle restaurant in Southern Nevada. Wade Tyler Millward reports.
Art Bell’s Top 10 Shows
A selection of radio host Art Bell’s most popular shows.
Hooters owner talks about room upgrades at his hotel-casino
George Ruff, founder and senior principal of Trinity Hotel Investors L.L.C., owner of Hooters Hotel and Casino in Las Vegas, talks about recent room upgrades at the hotel. K.M. Cannon/Las Vegas Review-Journal
Passengers Discuss Allegiant Air
Allegiant Air passengers voice their views on the airline at McCarran International Airport on April 16, 2018. (Bailey Schulz/Las Vegas Review-Journal)
Longtime Las Vegas attorney John Momot dies at age 74
Criminal defense attorney John Momot, who represented mob figures and even played himself in the movie “Casino,” has died.
Trump Slams Amazon for Not Paying Enough in Taxes
Trump Slams Amazon for Not Paying Enough in Taxes Trump tweeted his concerns about the company on Thursday. This isn't the first time Trump commented on the issues via Twitter. August 2017 December 2017 Amazon did hold back on paying state taxes in 1995, but the company has been routinely collecting state sales taxes since then. In 2016, the company's report from the Securities and Exchange Commission confirmed it paid $412 million in taxes.
David Copperfield in court after man injured during magic trick
The attorney for a British man who is suing illusionist David Copperfield said his client suffered serious injuries after being called on stage during Copperfield's show at MGM Grand.
eyecandylab CEO shows augmented reality during NAB
Robin Sho Moser, CEO and co-founder of eyecandylab gives an augmented reality demonstration at his booth during the National Association of Broadcaster Show at the Las Vegas Convention Center. K.M. Cannon/Las Vegas Review-Journal
Trends in access to capital for local black business owners
Denette Braud, owner of Braud’s Funnel Cake Cafe, talks about what owning her own business means to her.
Sir Richard Branson announces purchase of Hard Rock Hotel
Sir Richard Branson, founder of the Virgin Group, has acquired the Hard Rock Hotel with partners and plans to turn it into a Virgin-branded property by the end of 2019.
Calvary Christian Learning Academy, “There was no fair warning.”
Samantha O’Brien, whose three-year-old daughter attended the Calvary Christian Learning Academy daycare, found out Monday night when her daughter’s teacher called about the school closing.
Adobe unveils #HackTheBracket application for March Madness
Adobe unveiled their #HackTheBracket application at the Adobe Summit trade show at Sands Expo. People can use data from Adobe Analytics to make their bracket for March Madness. K.M. Cannon/Las Vegas Review-Journal
Adidas Signs Yankees' Star Aaron Judge
Adidas Signs New York Yankees Star Aaron Judge The slugger is set to don a new set of stripes this season after signing with the apparel company. Aaron Judge Terms of the deal were not disclosed. The deal includes branding on his batting gloves and wristbands. Judge, the AL's reigning Rookie of the Year, was previously under contract with Under Armour since 2014. Judge won the American League Rookie of the Year award last season after setting an MLB record for most homers in a rookie season (52).
Esports athletes are sponsored, too
Meet Red Bull-sponsored professional esports player Daryl S. Lewis, better known by his in-game name Snake Eyez. Nicole Raz Las Vegas Review-Journal.
Bettor Investments turned into a bad bet
Bettor Investments formerly operated a Nevada-licensed entity betting operation. The company promised “conservative growth, profits and stability for our investors.” Matt Stuart, who ran the fund, shut it down in late 2016 and never made good on an agreement with shareholders.
Starbucks Will Give You $10 Million for a Better Cup Design
Starbucks Will Give You $10 Million for a Better Cup Design Get your thinking caps on because the company is looking for a new cup that's easier to recycle. The $10 million grant challenge sees Starbucks partnering with investor group Closed Loop Partners for the project. According to CNN Money, Aside from the new cup design challenge, Starbucks stated it will test a cup with an inner lining made from plant fibers to prevent hot liquid from leaking. Will you join the challenge for #Bettercups?
Las Vegas bartenders who worked the Route 91 Harvest Music Festival question what they were paid
Reneé Black, left, and her husband Griffin Black talk to the Review-Journal at their home in Las Vegas, Tuesday, March 6, 2018. Reneé was a bartender at Route 91, and Griffin was a bar back. They were hired as independent contractors, but received forms months later indicating they were employees. They also were never paid their last day of tips. Nicole Raz/Las Vegas Review-Journal.
Bad-beat jackpot money will finally be awarded
People who thought they had won in Station Casinos’ “bad beat jackpot” poker promotion were unhappy. They waited months to get paid. And now the bad-beat jackpot is gone.
New developments coming to Las Vegas' Craig Road
Gina Gavan, economic and business development director for North Las Vegas, discusses new development projects on Craig Road in North Las Vegas. Art Marroquin/ Las Vegas Review-Journal
Companies bet their futures on cryptocurrency
Two Las Vegas entrepreneurs talk about finding their niche in blockchain enabled technologies and digital currency.
Solar panels reduce energy bill for CCSD
Wilbur and Theresa Faiss Middle School is one of 42 CCSD schools with solar panel installations, saving approximately $514,000 per year in energy costs.
Dallisa Hocking And A Grandmothers Psychic Gift
Dallisa Hocking’s new “boutique soul center” pays tribute to her late Grandma Ellie. (John Przybys/Las Vegas Review-Journal)
Can't pay the IRS? You do have options
There's a little more than five weeks until this year’s tax filing deadline of April 17. But many small business owners are wondering, “How am I going to pay my taxes?” When owners haven’t set aside enough money to cover what they owe the government, they have options. — The easiest and cheapest alternative may be to dip into personal savings. — If you have available credit, you may want to borrow from a lender or credit card. — Also, the IRS can work out an installment payment plan.
Amazon Offering Discounted Prime Memberships to Medicaid Recipients
Amazon Offering Discounted Prime Memberships to Medicaid Recipients Individuals with a valid Medicaid or Electronic Benefits Transfer (EBT) card The $5.99 membership can be renewed every year for up to four years. The reduced Prime membership comes with the same benefits of a standard one, including free two-day shipping, Prime Video, Prime Music and Prime Now. Last year, Amazon also joined a USDA pilot program that allows those receiving government assistance through the Supplemental Nutrition Assistance Program to buy groceries through online markets like Amazon's FreshDirect or Walmart.
Jeff Bezos New Net Worth Revealed, Still Richest Man Alive
At the end of 2017, Bezos was estimated to be worth $112 billion, earning the top spot on Forbes' world's billionaires list. According to the Bloomberg Billionaires Index, the Amazon founder's net worth is now $127 billion, which the report states is the combined wealth of 2.3 million Americans.
Dick's Sporting Goods Ends Sale of Assault Weapons Florida School Shooting
Dick's Sporting Goods Ends Sale of Assault Weapons Florida School Shooting The retailer announced the move in an open letter and an appearance by CEO Ed Stack on 'Good Morning America.' Ed Stack, (Good Morning America) Ed Stack, (Good Morning America) Dick's is also ending the sale of high-capacity magazines and sales of guns to people under 21 years old. The company ended the sale of assault weapons at Dick's-branded stores after the Newtown, Conn. school shooting in 2012. However, they were still selling them at its 35 Field & Stream locations. Nikolas Cruz, 17, shot and killed 17 students at Marjory Stoneman Douglas High School in Florida on Feb. 14.
Black History Month panel gives Las Vegas entrepreneurs advice
Five people with experience in business and government spoke Friday to the Urban Chamber of Commerce in Las Vegas Among their advice: line up potential clients before starting a business, attend networking events and seek advice from experts in the industry The chamber, founded in 1980, has hundreds of members and focuses on the welfare of black-owned businesses in Las Vegas
Nevada's tech talent
Nevada is 13,325 jobs short of the top 10 in-demand information technology ecosystem occupations.
Las Vegas Ballpark breaks ground
The Las Vegas 51s throw a celebration to break ground on their new stadium in Summerlin.
Art Bell’s Top 10 Shows
A selection of radio host Art Bell’s most popular shows.
Calvary Christian Learning Academy, “There was no fair warning.”
Samantha O’Brien, whose three-year-old daughter attended the Calvary Christian Learning Academy daycare, found out Monday night when her daughter’s teacher called about the school closing.
Companies bet their futures on cryptocurrency
Two Las Vegas entrepreneurs talk about finding their niche in blockchain enabled technologies and digital currency.
Solar panels reduce energy bill for CCSD
Wilbur and Theresa Faiss Middle School is one of 42 CCSD schools with solar panel installations, saving approximately $514,000 per year in energy costs.
News Headlines
Local Spotlight
Home Front Page Footer Listing
You May Like

You May Like