The recent news regarding commercial property in Las Vegas is bleak at best. The Las Vegas Sun article titled, "Las Vegas braces for commercial foreclosures" exposes how the decline in the Las Vegas economy is beginning to be reflected in an increase in the number of defaults on commercial real estate loans. Before 2007, Las Vegas was a boom town with a variety of new commercial properties. New strip malls, office buildings and industrial space sprang up to support the appetite of the growing southwestern city. However, the rising tide of unemployment and business failures is putting these commercial properties on shaky ground. According to New York-based Real Capital Analytics’ senior analyst Jessica Ruderman, the value of the troubled commercial loans is now $6.4 billion is figure is up from $4.7 billion in early 2008. The $6.4 billion reflects 26 percent of the Las Vegas commercial market is either in default or foreclosure.
Many fear that the number of commercial defaults seen in Las Vegas is not just an anomaly unique to the entertainment capital of the world. The Wall Street Journal has reported that as many as 700 banks could fail because of a combined exposure of up to $250 billion in potential commercial real estate losses. If this report becomes reality commercial properties around the country will look like ghost towns and we will more than likely see yet another government sponsored bank bailout.
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I really dont like hearing about these government sponsored bank bailouts. All you ever hear about afterwards is that these huge companies spent the bailout money on unnecessary things. I already see now where many places have sprung up, shopping centers, strip plazas, and executive offices. I live in North Port and many places have been around and just sitting for years because of the economy decline. Just to name a few, on Toledo Blade and Panacea, there are many new office buildings that have been built almost 3 years ago and still have no one in them. On Price and Atwater, there is a strip plaza still empty. And on 41 just before you get to Toledo Blade heading north, there are more empty offices/shops. I have seen places even go as far as advertising free rent for a year just to get somoeone into these buildings. I have seen one particular house in my neighborhood have 3 different tenants in the last 6 months, you can only assume they are being evicted for non-payment of rent. These times are getting hard on everyone and I definitly see the businesses that were going to open, closing. The worst part about it is, right now because the market for buying is so good, it would be the perfect time to buy some property for business use. However, since the economy is so bad, you have to make sure you are in a sure market for your product/service to survive the decline.
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