For the first time over the past several years, data suggests that the Las Vegas real estate market is on firm footing and closing in on long-term stability again with no significant fluctuations or road blocks. Foreign and domestic investments and the luxury home market are rising, and many are considering re-entering the market. With decades of market experience and hundreds of commercial real estate transactions under our belt in the Las Vegas market, our team at Fortis Commercial Advisors has put together 5 key factors for investors to consider before buying Las Vegas commercial property.
- Know Comparable Sales
You must know and understand current market values. Comparable sales offer insights into sales of similar properties in the same or nearby areas and provide buyers a basis for understanding of how properties are selling in an area and the profit potential of a particular property. While understanding this is crucial, comparable sales alone do not give you the whole story.
- Know Where Cap Rates Are
Along with comparable sales, understanding cap rates is essential. This is a great indicator to size up an acquisition in relation to other investment properties. An example of this would be a 5.8% cap rate vs. a 10.2% cap rate for a similar property in a similar area communicates to you that one property holds much higher risk than the other. Cap rates can also indicate trends over time showing where that market is heading. Cap rates can vary greatly from product type to product type, so partnering with an expert in the market you are looking to invest in is the easiest way to get this information.
If you are an investor the income of a property is going to be a driving factor for the pricing, as valuations are based on that income. The net operating income of a property signals the earnings it will have after deducting operating expenses. Rental incomes are often forecasted by looking at comparable properties in the area. This is where great market research becomes invaluable to an investor, so they can get an overview of prices tenants are currently charged in that area, and look for trends to forecast increases in rent.
Narrow your search to specific areas and look for indicators such as population, average age, etc. Once you choose a location, start looking at surrounding areas and compare. It’s crazy how just a few miles can make a world of difference in relation to taxes, resale values, and more. Narrowing down a great investment area can be easily simplified by partnering with an expert in the market.
Most investors are accustomed to an environment where there are low interests rates, and the Federal Reserve has kept these rates low to support economic growth and the U.S. economy. Most economists expect this to change in 2016 as the Fed increases rates. When this happens it could negatively impact your buying power as an investor, so consider getting in now before rates start to rise.
Our team at Fortis Commercial Advisors has a deep rooted understanding of the Las Vegas market through up to the minute market data. If you have any more questions about investing in Las Vegas real estate, or are looking for a partner that will help you make the right purchasing decisions contact us today here: https://fortis.vegas/contact-us/
Looking for investment ideas? Here are 3 of our latest property listings:
1. BAR & GAMING
46 S. Water St., Henderson, NV 89115
- 7000 sf Free Standing Building
- Located in the Heart of the Redevelopment area
- TI assistance available from City of Henderson
- Many proposed and new projects currently on Water Street
This property is a freestanding 7,000 sf facility in the heart of the Henderson Redevelopment area. The interior is very spacious there is a separate bar area and space for 11 gaming machines, full size commercial kitchen, three restrooms, office space and a couple of storage areas. The City of Henderson is currently offering many incentives including assistance with tenant improvements, funds for the facade and if certain conditions are satisfied the liquor license fee can be waived
2. OWNER USER or INVESTMENT
4079 N. Rancho Rd. Las Vegas, NV 89130
- 10 built out suits
- 70% Occupied
- Well maintained and easy to manage
- Excellent owner/occupant
The master planned community hosts 35 buildings with a diverse tenants mix. The property is well maintained, has easy access and excellent demographics. Rancho Alexander Business Park is conveniently located at the corner of Rancho and Alexander just south of Craig, with easy access to US-95, North Las Vegas Airport and the Veteran’ s Administration office.
3. IDEAL SCHOOL OR CHURCH
4845 Community Ln, Las Vegas, NV 89121
- 7799sf Free Standing Building
- One Acre
- Former day care
This free standing 7,799 sf building is situated on one acre just north of Tropicana near Sandhill. It was formerly used as a day care and leased for a short time as a religious facility. There are five large classrooms, several bathrooms, kitchen, office, storage area and to the north of the building there is fenced playground area.
Interested in learning about one of the properties above? Call us at (702) 777-0010.