Western Market Reports

Best Practices for Structuring Nevada Hotel, Casino Deals

by Taylor Williams October 9, 2018

One of the first questions clients ask when considering a hotel casino acquisition or the development of a new hotel casino project in Nevada is whether they have to obtain a gaming license. Since applying for a gaming license requires the disclosure of extensive, private personal information — and obtaining a gaming license can take several months — buyers and developers often want to learn about alternatives to the license. Those alternatives are briefly summarized below. Sale-Leaseback: The sale-leaseback structure involves the current hotel casino owner and/or operator selling substantially all of the assets to the buyer. The buyer, in turn, then leases all of such assets back to the seller. The seller retains the gaming assets and liabilities, utilizes the other assets per the lease and continues to operate the hotel casino for the lease term. The advantage of this structure is that the sale transaction can be closed quickly since the parties do not have to wait for the buyer to obtain its gaming license. A potential disadvantage to the seller is that it still has to operate the property. Possible disadvantages to the buyer are that the buyer assumes the future licensing risk and, generally speaking, cannot …

October 9, 2018

Industrial Market Reports Nevada Western Western Market Reports

Opportunity, Demand Define Las Vegas Industrial Market

by Taylor Williams October 2, 2018

The Las Vegas industrial sector set records in 2017, with more new construction and higher net absorption than any other time in the market’s history. New construction was dominated by pre-leased space primarily driven by transportation and logistics companies, namely ecommerce and retail-related businesses. As a result, the overall vacancy rate decreased to the second lowest level in market history. As a percentage of overall market size, Las Vegas led the country in both new construction and net absorption. The significant momentum of 2017 did carry over to the first quarter of 2018, albeit at a relatively slower rate. New construction totaled 1.3 million square feet and net absorption lagged deliveries at a positive 1 million square feet, marking the 22nd consecutive quarter of positive net absorption. The overall direct vacancy rate in the first quarter of 2018 was 4 percent, an increase of 50 basis points over the previous quarter. This provided much-needed inventory for tenants looking to enter or expand into the Las Vegas market. While the North Las Vegas submarket dominated 2017, accounting for nearly 70 percent of total net absorption, it is the Southwest submarket that is surging in 2018 with 53 percent of net absorption …

October 2, 2018

Market Reports Nevada Office Western Western Market Reports

Office Trends Toward Creative, Collaborative in Las Vegas

by Taylor Williams September 25, 2018

Some of the larger companies with long-term growth forecasts are focusing on expansion and amenity-rich office environments for recruiting purposes. However, more people in less space continues to be the trend for companies with slower growth opportunities that are focused on efficiencies and overhead costs. The average standard amount of office space per employee dropped from 225 square feet per person to between 150 square feet and 175 square feet per person in the past couple years. That being said, occupancy cost is not always the main driver in choosing an office location. There seems to be much more emphasis now on quality, functionality and conveniences. In many cases, this is based more on how we work rather than just cost savings. Open work spaces, perks like on-site dining and retail, and providing collaborative environments that foster employee interaction have proven to increase employee productivity significantly. Design is a critical component of this type of work space. Companies are looking for workplace designs and furniture systems that offer flexibility and adaptability as technology evolves. Technological infrastructure enhances the culture and efficiency of a business and protects the security of a company’s trade information. It also saves resources like …

September 25, 2018

Market Reports Multifamily Nevada Western Western Market Reports

Labor, Population Growth Drives Las Vegas Multifamily Market

by Taylor Williams September 18, 2018

Las Vegas continues to benefit from a strong labor market, which is driving demand and strong fundamentals in the multifamily sector. Employment in Southern Nevada increased by 3.4 percent over the past year, reaching one million workers, while the total population in Southern Nevada increased 2.2 percent, surpassing more than 2.2 million people. With a well-documented shortage in housing, developers added more than 3,200 new apartment units during the year and still saw vacancies decrease 30 basis points to 5.2 percent. Part of what is driving the tremendous growth in Las Vegas is the billions of dollars in commercial developments. This includes several major resort renovations (Palms, Monte Carlo, Caesars), several new resort developments (Paradise Park, The Drew, Resorts World), and the $1 billion expansion of the Las Vegas Convention Center. There is also the $1.9 billion football stadium that is helping usher the city into a new era of professional sports. On the capital side, multifamily properties continue to be highly sought after by both private and institutional buyers. Although transaction volume slowed in the first quarter of 2018 compared to the same period a year ago, total volume was more than $350 million in the first quarter, marking …

September 18, 2018

Market Reports Nevada Retail Western Western Market Reports

Vegas’ Retail Market Supports Economy Beyond Gaming, Hospitality

by Taylor Williams September 11, 2018

There is a lot of buzz in the Las Vegas market a full 10 years after the Great Recession. Much of this buzz surrounds sports with the new Golden Knights hockey team; the Las Vegas Lights professional United Soccer League team; Las Vegas Aces WNBA team; and the NFL Raiders team. The new Raiders stadium is under construction now and is widely considered the most talked-about major development happening in Vegas. In a city that offers unmatched access to world-class gaming, shopping, tradeshows and conventions, the NFL coming to town creates yet another reason for people to visit Las Vegas. As you can imagine, many retailers and investors are trying to position themselves to take advantage of this entry. The overall vacancy rate for retail in the Las Vegas metro area was 8.7 percent. Rents for new developments range from $2.50 per square foot, triple-net to $4 per square foot, triple-net. Existing neighborhood centers, power centers and strip centers average $1.75 per square foot to $2.25 per square foot. Anchor and mid-box leases average $0.75 per square foot to $1.25 per square foot for both gross and triple-net-structured leases. Ground lease and build-to-suit are averaging $120,000 to $225,000 in annual …

September 11, 2018

Market Reports New Mexico Office Western Western Market Reports

Albuquerque’s Office Market Sees Positive Absorption, New Construction

by Taylor Williams September 4, 2018

New Mexico’s office market has held steady along with the rest of the country throughout 2017. New development in areas outside of metro Albuquerque, like the Facebook development in Los Lunas, is attracting retail- and service-related businesses. While it remains to be seen what this means to the general commercial real estate industry, it is encouraging to see increases in activity in areas where there had been little to no growth in recent years. Albuquerque, the heart of New Mexico’s office market, saw positive absorption start to increase from the past two quarters. The market is seeing organic tenant movement and, more importantly, there has been a swelling interest in Albuquerque metro areas from out-of-state companies looking for a Mountain Time Zone location that is economically attractive. Co-working spaces have gained in momentum with several cropping up since the end of 2016. New co-working spaces include Gravitate, which has expanded into two new locations near FreeRange and the new Tramway Plaza. We expect this trend to continue as the state focuses on investing in entrepreneurs and startup companies. New construction is expected to increase the overall Class A inventory over the course of 2018 and 2019. Compared to many other …

September 4, 2018

Industrial Market Reports New Mexico Western Western Market Reports

Albuquerque’s Industrial Market Sees Strong Absorption From Warehouse, Manufacturing Users

by Taylor Williams August 28, 2018

The metro Albuquerque industrial market reported more than 39 million square feet of total industrial space as of year-end 2017. The two largest categories of occupied space were warehouse/distribution (12.5 million square feet with 5.5 percent vacancy) and manufacturing (12.55 million square feet with 3.5 percent vacancy). The overall market vacancy rate at the end of 2017 was 5.7 percent for all industrial uses in buildings with more than 10,000 square feet. New Mexico added about 11,000 non-agricultural jobs from February 2017 through February 2018. The Albuquerque MSA added 5,800 jobs — a 1.5 percent increase — over this period, or more than half of the new jobs added in New Mexico. Albuquerque’s unemployment rate was 5 percent as of February, which is a notable improvement over the 6.2 percent unemployment rate in February 2017. During this period, the private service-providing industries grew by 3,100 jobs, or 1.2 percent, while the goods-producing industries (warehouse and manufacturing users) added 2,300 jobs, representing a gain of 6.2 percent. Albuquerque’s industrial market experienced positive net absorption of more than 261,000 square feet during the fourth quarter of 2017. This was the highest net absorption since the fourth quarter of 2015, and the second-highest …

August 28, 2018

Market Reports New Mexico Retail Western Western Market Reports

New Mexico’s Retail Market Gives Steady Performance

by Taylor Williams August 21, 2018

The New Mexico commercial real estate market continues to be a safe play for owners and developers in the Southwest. Albuquerque, which contains 50 percent of the state’s population, continues to drive the market with more than 80 percent of the commercial real estate transactions. A moderate supply-demand imbalance currently exists. This imbalance will allow vacant real estate to be matched up with occupier requirements relatively quickly, taking the vacancy rate lower or continuing to place upward pressure on the need for new construction. The New Mexico market, like many others, has experienced little to no development on the periphery of the city. Instead, owners and occupiers remain focused on the core areas of the market where density can be increased for a more efficient use of retail or office space. Albuquerque’s tech sector is also picking up momentum through the organic growth of existing companies and a large push from the University of New Mexico in partnership with the business community. New Mexico has one of the highest per capita concentrations of doctorate degrees in the U.S. The vacancy rate for retail space sits at 12.5 percent as of the first quarter of 2018. The outlook will be trending …

August 21, 2018

Facebook-Data-Center-Los-Lunas-New-Mexico

Market Reports Multifamily New Mexico Western Western Market Reports

New Companies Bring Larger Needs for Multifamily Housing to Albuquerque

by Taylor Williams August 14, 2018

Albuquerque is a hidden gem. It isn’t a huge market when compared to places like Seattle, Austin or Denver, but that doesn’t mean there isn’t room for growth and development. The Urban Land Institute predicts Albuquerque’s development will trail other metros with stronger economies in 2018. But there are positive trends and developments for Albuquerque and the surrounding areas, which can make us competitive. A new Facebook data center was built in Los Lunas, a 30-minute drive from Albuquerque. This has created new jobs for the Los Lunas and Albuquerque areas. Anywhere from 800 to 1,000 workers go through the data center every day, and 80 percent of them are from New Mexico. The center will have a $2 billion impact on the state and metro areas, leading to more jobs and opportunities for the region. Albuquerque will also take part in the “Facebook Community Boost Program.” The program helps the community by offering free workshops, business training and networking to boost careers. More companies like Facebook can be recruited to New Mexico as long as we make the area business-friendly and retain talent so everyone can succeed. With more jobs and opportunity, there will be an immediate need for …

August 14, 2018

Colorado Market Reports Retail Western Western Market Reports

Investors Continue to Pay a Premium for STNL Retail Properties in Colorado

by Taylor Williams August 7, 2018

Single-tenant, net leased (STNL) retail properties continue to be among the most highly sought-after real estate investments. This is particularly true in Colorado and California where supply and demand constraints have created sales with significant premiums. Investors are accustomed to paying low cap rates for single-tenant assets within California as these properties have historically traded for a significant premium in comparison to the rest of the nation. However, the premium associated with Colorado STNL retail properties is a fairly new phenomenon. This Colorado premium can be attributed to a considerable supply and demand imbalance. There are very few available STNL properties within Colorado, and substantial capital actively chases this product type. California-based 1031 exchange investors seeking higher yields and Colorado-based 1031 exchange investors selling multifamily properties at historic pricing (due to significant appreciation in rents and historically low cap rates) are spurring the increased demand. Colorado’s strong economy and recent population growth has also led to a lot of new development. This has impacted the quality of available properties, many of which are new construction with long-term leases. The median sold cap rate for a STNL retail property in Colorado was 6.02 percent in 2017. This represented a 38 basis …

August 7, 2018

Newer Posts

Older Posts