Las Vegas Commercial Real Estate

John Vanhara

From time to time I check commercial real estate deals in other cities. Not that I understand their market, and cannot really judge how good the deal is, but it helps me understand mine local deals. It also open your eyes to look for new opportunities beyond your own backyard.

We have all talk about real estate bubble. It really keep me thinking what will be good real estate investment. Is investing in dynamic market like Las Vegas, NV or Southern California better than investing in slower markets? But what about the price per sq. foot. I can pay $250 per sq. foot for office building in Las Vegas, $400-$500 in the coast areas of Los Angeles or $68 on this deal in Albuquerque.

$68 is way below replacement cost. That means till the price goes up there will be no builders building commercial office building to compete with this one. If Albuquerque is growing that means market for commercial should grow too. Right? I myself am looking for answers on these questions:-)

Here is the deal I am talking about:
Listed by Art Lacy, Lacy Land Investment and described as: A two story office building, approximately 14,400 sq/ft housing primarily smaller tenants in offices from 150 sq/ft to 1000 sq/ft with average size of 400 sq/ft. Largest tenant is Bank of The West Branch with lease ending 5/2008, most other tenants are month to month. Most tenants have been in the building for 4+ years. Several have tenancies exceeding 15years. Tenants stay because of the excellent condition and low rental rates. Most rental rates are below market for condition and location of the building. Present rate averages $8.80 sq/ft, full service. The immediate neighborhood is one of the most affluent, older neighborhoods in Albuquerque. Area homes and businesses are well kept with “pride of ownership”. The building is located on a larger tract of land with commercial occupants including a Smith’s Supermarket, a popular local restaurant and 2 other banks. Owner manages this building.

Building Size: 14,400 SF
Lot Size: 36,000 SF
Occupancy: 100.00%
Price: $990,000
Price/SF: $68.75
Cap Rate: 8.00%
Year Built: 1960

Financial info:
Effective Gross Income: $121,046
Maintenance: $6,000
Total Expenses: $42,864
Net Operating Income: $78,182

This entry was posted on Tuesday, January 24th, 2006 at 4:08 am and is filed under Deals. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.