Las Vegas Business Press :: News : Valley retail market left reeling in fourth quarter

Valley retail market left reeling in fourth quarter

Siegel Group pays $12 million for Barcelona hotel-casino

BY TONY ILLIA

A credit crunch, housing crisis, and soured economy hobbled Southern Nevada's retail market heading into year's end, CB Richard Ellis reports. A sinking economy and rising unemployment left shoppers with less discretionary income during the holidays that resulted in less consumer spending. Las Vegas' retail sector consequently had sinking rents, soaring vacancies, and negative absorption during the fourth quarter. Southern Nevada vacancies climbed to 9.9 percent Dec. 31, up 500 basis points since a year ago, while the market recorded its second straight quarter of negative absorption at 627,217 square feet.

"The retail market has taken the hit, especially in our market since it typically follows rooftops," said Zack Hussain, a senior retail associate in CB Richard Ellis' Las Vegas office. Even the people that have money are holding on to it and saving. Everybody is being very conservative. We see families not eating out as much."

Many local and national retailers are awaiting the 2008 holiday results to see whether they can stay in business. Statewide unemployment, meanwhile, reached 8 percent, a 25-year high. But hiring at the newly opened Encore at Wynn Las Vegas and the forthcoming CityCenter and Fontainebleau resorts offer glimmers of hope.

COURTESY THE SIEGEL GROUP NEVADA
The Siegel Group Nevada recently bought the 179-room Barcelona hotel-casino at 5011 E. Craig Road in Las Vegas for $12 million.

COURTESY SCHWARTZ COMMUNICATIONS
Shawmut Design and Construction recently completed the 115-seat LBS: A Burger Joint restaurant for Station Casinos inside Red Rock Resort.

COURTESY ROEL CONSTRUCTION
Roel Construction completed a 3,600-square-foot charity remodeling for the I Have A Dream Foundation's Learning Center at 2101 Texas Star Lane in North Las Vegas.

Developers, however, continue to experience difficulties securing financing for planned projects, and investors and retailers are more wary than ever of expansion. Retail space under construction dropped nearly 20 percent last quarter, with General Growth Properties' halting work on its 2 million-square-foot Summerlin Centre project and Citation Property Group hitting the brakes on The Clock Tower at Seven Hills in Henderson.

There was also a 35-percent drop in planned space in the fourth quarter due to developer wariness and credit woes. Casualties include General Growth Properties' 46-acre, 388,755-square-foot South Square Marketplace at Town Center Drive near the Las Vegas Beltway and Laurich Properties' 101,612-square-foot Lake Mead Village at Lake Mead and Martin Luther King boulevards. There was slightly more than 3.5 million square feet completed in 2008, which 32 percent less than the previous year.

"Overall, the mood of Las Vegas retail going into 2009 is one of caution," said Sara Dinwoodie Welser, CB Richard Ellis' research manager. "We are confident, however, that Las Vegas remains an attractive place to do business, live, and visit, and that the retail market here will weather the recession and rebound."

PROJECTS

Ninyo & Moore is providing quality assurance for the Clark County Water Reclamation District's five-year, $1.1 billion capital improvement program scheduled to finish in 2012.

Roel Construction completed a 3,600-square-foot charity remodeling for the I Have A Dream Foundation's Learning Center at 2101 Texas Star Lane in North Las Vegas. The $8,000 project, designed by Westar Architects, consisted of new paint, carpet and shelving. I Have A Dream Foundation is a nonprofit organization that helps at-risk children with after-school programs and college tuition.

Shawmut Design and Construction completed a 3,500-square-foot tenant improvement for Station Casinos inside Red Rock Resort at 11011 W. Charleston Blvd. in Las Vegas. The 115-seat restaurant, LBS: A Burger Joint, was designed by 1027 Design Management.

MILLION DOLLAR DEALS

The Siegel Group Nevada bought the 179-room, 4.18-acre Barcelona hotel-casino at 5011 E. Craig Road in Las Vegas for $12 million, or $67,039 per unit, from Jewel Dixon Jr. The property, which has an unrestricted gaming license, contains 260 slot machines, table games, a sports book and a restaurant-bar. The sale included a Shell gas station on 0.68 acres, with a 3,200-square-foot convenience store leased to Green Valley Grocery. There is also 5.15 acres of adjacent vacant land zoned for multifamily use. The 24-year-old property will be rebranded as Siegel Slots and Suites and will be managed by Sasco Properties, a Siegel unit. United Coin will handle the gaming portion separately. It marks Siegel's second hotel-casino in Las Vegas. The Los Angeles-based company last year bought the 118-room Gold Spike hotel-casino at 400 E. Ogden Ave. in downtown Las Vegas for $21 million.

GFY LLC borrowed $3.62 million to refinance a 28-year-old, 72-unit apartment complex on 1.54 acres at 1910 Ferrell St. in Las Vegas. Access Commercial Mortgage's Devin Lee procured the five-year, fixed-rate loan, which has a 63 percent loan-to-value ratio and a 30-year amortization.

Contact reporter Tony Illia at 702-303-5699 or tonyillia@aol.com.

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