URBAN UPDATE

Although we’ve had our economic ups and downs in this city, we have always been a city of dynamic change, growth, controversy and fame. Today, most of us are familiar with the national mortgage crisis, but few of us think of the opportunities that abound for the cash-rich.

With a weak dollar compared to other well-known currencies, foreign buyers have hit the headlines in recent months with multi-billion-dollar investments in major U.S. projects such as the $6-billion Dubai investment in the MGM CityCenter on the Strip. But how does that trickle down to affect the single-unit purchases we rarely hear about? With the U.S. dollar weakening against foreign currencies, international investors are snapping up many of the Strip's high-priced condos, as well as condos in the downtown Las Vegas area.

These single- and multiple-unit purchases are great values now, and they continue to breathe life into a market hurt by the single-family-home crisis in suburban areas. For this reason, the urban areas suffer fewer foreclosures, less depreciation, and weather economic distress much better. The new U.S. Real Estate economy is now the foreign investors’ sandbox, and world-famous Las Vegas with its massive potential is ripe for the picking.

Individual foreign buyers are looking for second homes and vacation homes in the Las Vegas market. With the dollar weak, foreign investors have greater purchasing power than they might normally have.

Dusty Allen, developer of Streamline Tower—a 21-story high-rise in downtown Las Vegas that just opened in April—says, “Greater purchasing power combined with the ever-present global appeal to own a little part of world-famous sunny Las Vegas has helped our project attract international buyers. One of our project’s finest residences overlooking Las Vegas Boulevard and Freemont Street recently contracted to a couple from Alberta, Canada, who plans to purchase the $950,000 residence all cash.”

Many investors also seek on-site leasing and management programs to help them reach a cash-flow-positive status in short order—a program also offered by Streamline Tower, and one that proved important to the Canadian buyers.

So in a time when most developers are afraid to move forward with even the smallest project, Frank and Lorenzo Fertitta—perhaps the two most forward-thinking businessmen in Las Vegas—are actually accelerating their plans to build a high-rise resort project in Las Vegas that'll be even larger than CityCenter.

While most journalists—along with salaried 40-hour-per-week economic experts—continue to write about how bad Las Vegas is, the billionaire Fertitta brothers are betting big with plans to redevelop the 110-acre site of the Wild Wild West on Tropicana and the I-15 at a cost of $10 billion.

Who should we look to for an accurate read on the future of Las Vegas? I think building a 14-casino empire in 13 years should account for something. The Fertittas understand Las Vegas will withstand the test of time. Deep down, I think we all believe that. Sometimes we just need the big boys to step up and remind us of that fact.

In a conversation with Ron Costa of Las Vegas Wealth Group, Frank Fertitta said, "It's very hard to predict cycles in the short run and know what's going to happen in the next six months or the next year… We've always placed our bets in over a five- to 10-year time horizon. When you have a solid strategy and look at the supply/demand dynamics in the Las Vegas Valley, the fact is the population is going to continue to grow over the next 10 years and there are limited places to build. Ours is really a strategic plan over the long run rather than trying to time the market in the short run."

Such is the long-term goal for the more than $12-billion plan for Union Park in downtown Las Vegas. Where will all the pundits be while we’re all enjoying a concerto at the Smith Center for the Performing Arts?

Still, individual buyers for Las Vegas high-rise condos continue to wait for the Real Estate market to drop and hit bottom. And you know what? They were right to do just that. Guess what, folks? It looks like the Las Vegas market finally hit rock bottom at the end of January, at least according to the “April Economy in a Glance” in In Business Las Vegas. In fact, I just heard about how one Real Estate office in town wrote up 17 offers during the weekend. Rumor also has it that Steve Wynn's $18-million Crown Jewel estate home received a full-price offer, as did The Falls in the Ridges Estates at $17.5 million.

Local economists are saying the cherry-picking is almost over. Yes there are thousands of foreclosures in Vegas, but not downtown and not in high-rise. The word is the banks are not giving anything more away because they realize the listings in the MLS are at an all-time low compared to the past 12 months. Gaming is up, rental rates are up and leasing is also up.

If you have champagne taste and can only afford beer, there are situations developing in this market that are perfect for you. Remember, despite what you read in the paper, there are still 40 cranes in the sky, there's million-dollar construction going on, and 100,000 jobs are on their way.

Yes, Canadian and European investors are making quite a dent throughout the Las Vegas Valley, along with forward-thinking developers. And deals like that may just keep our economy humming along enough to recover in quick order. As I like to say, people should follow the money trail, not the horror-story-loving media.

Sound familiar? I've been saying that all along.

Gary Fisher’s broker experience is derived from his 15 years of business management in manufacturing and Internet technology. His first Internet company in 1999 evolved into Internet advertising/marketing strategies for Real Estate where he learned the ropes through training hundreds of successful brokers and agents. Gary believes communication and customer service is still No. 1. To discuss Real Estate, market opportunities, business development, relocation or property management, please contact him at (702) 335-5704.