Las Vegas’ Market on an Upward Trend
As President of NAIOP Southern Nevada, I’ve seen the commercial real estate industry recover well in Southern Nevada, supported by strong financial indicators.
In fact, at this point in 2015, our industry is on a solid upward trend, even if it has felt a little slow getting to this point. Our recovery is being aided by a mixed pot of broadening financing sources, more successful transactions, large-scale public projects and legislation — all of which is combining to create an increasingly favorable financial climate for the commercial real estate industry in Southern Nevada. It is my belief this will continue throughout the year and into 2016.
Midway through our state’s legislative session, there are some positive indicators. Earlier this year, the president of the University of Nevada, Las Vegas, Len Jessup, voiced his support for legislation that would increase initial funding for the planned UNLV medical school. This project and the UNLV Hotel College building project, which is also seeking extra funding during this session, both have a goal of being finished by 2017. If both of these projects receive extra funding during the 2015 Nevada State Legislative Session, these developments could be huge for the Southern Nevada commercial real estate market. They would add jobs and enhance ancillary industries while encouraging additional commercial development in the area.
Founded locally in 1986, NAIOP Southern Nevada is committed to advocating on behalf of our members at the local, state and federal levels. To that end, we maintain an active government affairs committee with experienced advocates representing each level of government to speak for our members. As the economy grows and commercial development picks up more steam, it’s important for our industry to have a voice in Nevada’s Capital, Carson City, when the legislature is in session. NAIOP employs a dedicated lobbyist who resides in Carson City during the legislative session to ensure our growing membership has a seat at the table. This allows our membership to stay abreast of legislative news as it happens and better understand how it affects our industries – like how these UNLV issues shake out.
The university is also seeking a Tier I ranking, up from its current Tier 2 status. This would add to the school’s credibility, hopefully attract more researchers, students, faculty and visitors, and eventually attract even more development. Strong university cultures equal strong development and commerce in the surrounding university neighborhoods and areas.
Five years after the Great Recession, Southern Nevada lending conditions are showing signs of recovery. With commercial real estate fundamentals and investment prices on a solid upward trend, lending conditions eased as financing sources broadened in 2014. That has continued into 2015, and as a result the incidence of failed transactions due to lack of financing is diminishing with each passing year. The principal obstacle to sales now is the lenders’ underwriting standards.
Even within our own membership ranks, people are spending more. As one example, NAIOP Southern Nevada’s membership is growing for the first time since the recession, with 380 members. That’s up from the 2013 total of 320. That in itself speaks volumes about our industry — companies are no longer struggling just to survive but are again invested in nurturing and growing the commercial real estate and development community in Southern Nevada. Members from professional sectors such as architecture, law, banking and public affairs also have seen the value in joining and maintaining membership with NAIOP, another economic indicator that things are moving in the right direction. As a result, today’s NAIOP represents a diverse set of industries that continues to further diversify in order to meet the ever-changing Southern Nevada business and real estate landscape.
Charles Van Geel is the Vice President of Commercial Leasing, American Nevada Company, LLC and the President of NAIOP Southern Nevada
