{"id":1004423626,"date":"2020-05-04T01:46:41","date_gmt":"2020-05-04T09:46:41","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004423626"},"modified":"2020-05-05T00:38:28","modified_gmt":"2020-05-05T08:38:28","slug":"las-vegas-deals-sputter-as-casinos-shutter","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/las-vegas-deals-sputter-as-casinos-shutter\/","title":{"rendered":"Las Vegas Stripped of Appeal as Casinos Suffer"},"content":{"rendered":"
\"\"<\/a>

Image via Pixabay.com<\/i><\/p><\/div>\n

A month and a half after the historic closure of Nevada’s nonessential businesses<\/a>, Governor Sisolak outlined a recovery plan for the state on April 30. While many businesses could begin opening in phases as soon as mid-May, the fate of Las Vegas’ 440 licensed casinos remains in the hands of the Nevada Gaming Control Board.<\/p>\n

While Vegas\u2019 casinos had actually closed before\u2014for one full day following the JFK assassination, for example\u2014the March order truly was unprecedented, both in terms of scale and scope. Shopping malls, conference centers and recreation facilities shuttered, and the city\u2019s restaurants were forced to shift to carry-out or delivery options only, similar to what has, by now, become commonplace across the country.<\/p>\n

\"\"<\/a>

Image via Pixabay.com<\/i><\/p><\/div>\n

These hurdles have the power to unmake many of the gains made by Las Vegas\u2019 diverse commercial real estate sectors throughout the past decade. For example, while Yardi Matrix data has long noted the metro\u2019s multifamily rent growth<\/a> as far outpacing the national average, skyrocketing unemployment could make rent collection a real issue. The retail sector faces similar issues, as stores remain closed and rents come due. In the office sector, as millions of Americans have shifted to working from home<\/a>, demand for new, high-end space has fallen off a cliff, leaving developers and value-add investors holding the proverbial bag.<\/p>\n

And then, of course, there\u2019s Las Vegas\u2019 critically important hospitality industry. In addition to casino closures, grounded flights and canceled conferences have gutted the sector in a matter of weeks. In April, RevPAR had already fallen, on average, more than 75 percent nationwide<\/a>, and figures specific to Las Vegas are likely even more severe.<\/p>\n

While the governor’s phased approach to reopening the state’s businesses is a positive step, Las Vegas’ real estate is still affected. With unemployment continuing to spike, consumer confidence and spending habits will take much longer to recover, leaving the future of many of the metro’s primary economic drivers up in the air.<\/p>\n

Deals drop off<\/strong><\/h2>\n

What has this meant in terms of the metro\u2019s investment volume? Public records filed with the Clark County paint a bleak\u2014albeit uneven\u2014picture. Looking at the weekly volume of recorded Las Vegas property sales, a clear downward trend emerges. Transactions of less than $5 million were excluded from this analysis.<\/p>\n

\"\"<\/a>

Source: Clark County Recorder’s Office<\/p><\/div>\n

In the four weeks following the March emergency order, $141.6 million in property transactions closed in the county, nearly a third less than the $210.6 million from the previous four-week period. Though it comes with a caveat that deals may still be closing with greater delays due to increasingly overburdened county record offices<\/a>, the sheer drop-off in volume offers a compelling narrative that investors are taking a \u201cwait-and-see\u201d approach to acquisitions. While the graph above excludes land sales, these too have fallen in a similar way, falling 46.8 percent from $69 million to $36.7 million between the same two timeframes.<\/p>\n

So, what\u2019s selling?<\/strong><\/h2>\n

The breakdown between asset types involved in the deals\u2014both before and after the government order\u2014also provides us with some perspective on which sectors are feeling more pressure than others:<\/p>\n