Las Vegas’ commercial real estate market will not fully recover anytime soon from the recession, but it has one perk: low-priced deals for investors.
Prices for strip malls, office buildings, warehouses and other commercial properties are about 20 percent below what they were in 2000, while other U.S. markets are 75 percent higher, said Glenn Mueller, a professor at the University of Denver’s school of real estate and construction management.
“I’d say to an investor, Las Vegas is a screaming buy,” Mueller said Thursday at a commercial real estate symposium hosted by UNLV’s Lied Institute for Real Estate Studies.
It’s unclear when investors will reap the benefits of their discounted deals, though. Occupancy growth and rental rates are no longer at bottom but still trail most of the country. An expected influx of Baby Boomer retirees could eventually help the commercial real estate market, given their need for retail, medical and financial management services, Mueller said. In the meantime, the business has a long ways to go.
“The income potential hasn’t picked up yet,” he said in an interview.
Some buyers have flocked to Las Vegas. In recent months, national investment firms and other out-of-state buyers made bulk purchases of office buildings, shopping centers and fast-food restaurant properties.