Panattoni picks up distressed property

Panattoni Development, a major commercial developer and landlord in Las Vegas, has acquired a bank-owned office and industrial project in the southwest valley near the Las Vegas Beltway and Buffalo Drive, a company executive said Wednesday.

It’s one of the first distressed commercial properties to be acquired in Las Vegas following a spike in commercial mortgage defaults that started last year, a trend that’s forecast to wreak more havoc on the banking industry.

Doug Roberts, senior vice president for Sacramento, Calif.-based Panattoni, said his company paid $7.3 million for the note from Nevada State Bank, plus about $500,000 in liens on the property. It was sold in a short sale, or for less than the loan amount, to avoid foreclosure, he said.

Panattoni is marketing four office buildings and eight industrial buildings on the 19-acre site for sale, lease or lease with an option to purchase. That will leave 11 acres of improved land that can be held for speculative construction, build-to-suit for a specific tenant or it could be sold outright given the right offer, Roberts said.

“It’s high quality in a great location,” he said. “There’s not that many for-sale buildings in the southwest. Once we move through this, there’s not going to be a lot of competition. You can’t say that in North Las Vegas.”

Roberts said investors realize there’s an opportunity to buy commercial property in Las Vegas at half the listing price of the last year or two.

“I think the key is timing. Are we buying at the right time? If we don’t buy it, somebody else might. It’s standard business practice,” he said.

Pat Marsh, the property’s listing agent from Colliers International, said pricing on the completed 97,000 square feet of office and industrial space starts at about $100 a square foot and the vacant land is about $11 a square foot.

“In that submarket, there’s nothing cheaper. Nothing,” Marsh said. Two years ago, office buildings were selling for $220 to $250 a square foot for “grey shell,” or unfinished interior, he said.

Marsh said he hasn’t seen a lot of bank-owned commercial transactions yet, but they’re coming. He’s working on several deals and said it’s not as easy as people think.

“Banks are being very selective in which properties they sell and who they’re selling to. It’s not a free-for-all here,” Marsh said. “Panattoni had a track record with the note holder. That carries a lot of clout.”

Commercial mortgage defaults became a significant risk last year. Rising vacancy in apartments, office buildings and retail centers means less income for property owners to pay their debt service. Plummeting property values and a tight credit market made it nearly impossible to refinance.

Monthly reports from Nevada Title Co. showed notices of commercial default surpassing property sales about a year ago and steadily increasing. August’s report from First American Title included a $25.2 million foreclosure on Boca Fashion Village, 680 S. Rampart Blvd., by City National Bank.

“I think the preferred approach is for banks to find a developer like Panattoni to take over and finish a property,” John Restrepo of Restrepo Consulting Group in Las Vegas said. “They’re trying to work with the developer as opposed to taking the property back and have someone pay 20 cents to 50 cents on the dollar for it. That’s why we haven’t seen a flood of commercial REOs (foreclosures).”

Judy Placencia of Prudential Americana Group said she has clients interested in buying high-rise condo projects that are bank-owned.

“They see now as an opportunity to buy,” Placencia said. “I’m hoping to sell them one that is downtown and very beautiful, but they are on the fence about downtown Vegas.”

John Vorsheck, regional manager of Marcus & Millichap in Las Vegas, said his client got a great deal on a downtown apartment complex on Eighth Street, paying $990,000 for a property that last sold for $1.3 million in 1999.

Whitney Tilson of New York-based investment firm T2 Partners told the Review-Journal in June that the biggest foreclosure wave is coming in the commercial sector with $3.5 trillion in outstanding mortgages.

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

ad-high_impact_4
Business
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
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
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like