ACCESS LASVEGAS AUGUST | SEPTEMBER 2009
YOUR ACCESS TO THE LAS VEGAS MULTI-FAMILY HOUSING MARKET
Early Speculators Face Harsh Reality, Want Do-Over At MGMâ€™s City Center Even if you don't pay much attention to the Las Vegas condo bust, you've probably heard something about MGM's City Center development, an ambitious mega project conceived during the boom. Due to the awful Las Vegas economy the project has almost gone totally bust, but somehow the money is still there to finish the job. Anyway, early buyers who paid top dollar for this prime real estate want their money back. They want a do-over from having to committed to a purchase during the peak of the bubble.
contracts were signed in 2006 and 2007, when Las Vegas was booming.
Some buyers who signed contracts are demanding significant price reductions, and have hired a law firm to take their grievances to the project's principal developer, gambling company MGM Mirage. Others want their deposits back.
What's notable is that the buyers don't seem to have much of a legal argument to make. They're just saying the market has tanked since they agreed to buy and they want their money back or a discount!
So far, buyers have put down $313 million in deposits on 1,500 units in the 2,440-unit complex. Those who agreed to buy early on now fear they will take possession of condos whose market values are far below what they agreed to pay. Many of the
"It is simply not possible by any stretch of the imagination to close on the units at the contracted price," said Mark Connot, a partner with Hutchinson & Steffen, a Las Vegas law firm hired to represent a handful of buyers demanding price reductions. "Our position is they need to adjust the price to market value. And until that's done I don't think they will find any buyers."
Perhaps the buyers' real strategy is not to use the law, but to engage in collective bargaining. If they can present a unified front, and scare the developers into thinking they'll walk away en masse, then it just might work.
ACCESSLASVEGAS August | September 2009
IMPROVE YOUR PROPERTY TODAY: Standardize Your Leasing Practices for a Healthier Bottom Line in a Challenging Market Source: Richard Schreiber, SureDeposit and Dennis Smillie, Multifamily Solutions, Inc.
When the apartment industry is healthy, owners and property management firms invest in property management software. Today, with “same store” rental applications down 7.4 percent year over year, the industry is more focused on maintaining occupancies as a matter of preserving property valuations than on disciplined processes and back-office efficiency. Faced with this pressure to maintain occupancy and NOI performance, owners now have to choose between taking on more renter performance risk by offering larger concessions to applicants or keeping rents/concessions at existing levels and risk losing prospects to another property down the street. As a result, many owners are renting their units at steep discounts and incurring mounting bad debt in the process.
and Fair Credit requirements. Consider the credit card industry which relies solely on information provided in an application and sophisticated statistical modeling and scoring tools to make decisions about whether to decline or accept an applicant and to determine how much credit to extend to accepted applicants.
“Now is the time for owners and property managers to standardize their leasing processes while increasing their focus on maintaining good renter credit quality and pricing practices.” Today’s poor labor market has impacted so many applicants’ financial pictures that compromised credit histories are now commonplace. These types of sophisticated applicant scoring tools are available for use in the multifamily environment and standardize the approach to assessing applicant risk. Similarly, a standardized leasing approach can help your onsite team make sound, objective business decisions based on a consistent set of risk standards. This consistent approach takes the guesswork out of the equation and helps your organization better comply with Fair Credit and Fair Housing requirements.
But changes in the marketplace also create opportunities. Difficult times often challenge companies to take a closer look at how they conduct business and to seek out practices and performance improvements that help contribute to a healthier bottom line. Now is the time for owners and property managers to standardize their leasing processes while increasing their focus on maintaining good renter credit quality and pricing practices. Standardized leasing practices offer a number of benefits: • Maintain Fair Credit and Fair Housing Standards – Standardizing your leasing process allows your firm to better comply with Fair Housing 2
• Maximize Traffic Volume – Studies show that 50 percent of all email inquiries from prospective residents receive no response or are answered too late. This is because onsite staffing levels are lean and stretched by competing priorities. By gaining visibility to all unique rental inquiries and standardizing your follow up with the help of professional call centers and lead management software, you can capture every lead and ensure that prospects receive appropriate follow up. This can help you maximize the reduced traffic flow that characterizes the market today and close more leases. • Identify The Best Applicants – By using the proper tools such as lead management software, online leasing programs and statistically based screening, you can identify and harvest the best quality renters from a larger pool of applicants even when the overall quality of residents is down as a result of the recession.
• Set Effective Pricing – Setting your price should never be guesswork. Yield management software and market performance benchmarking tools offer better visibility into your market and access to actual competitive data and market analytics around traffic, pricing and renter quality. Relying on these kinds of tools provides real-world insight into how your market is pricing its product so that you can make better informed decisions about rental rates at your community. Just as importantly, adhering to those pricing decisions allows you to remain competitive without compromising your NOI goals. • Mitigate Your Renter Performance Risk – While bad debt is a cost of business that cannot be eliminated, establishing a standardized security deposit approach and adjusting your rules governing deposits based on an applicant’s risk profile can effectively mitigate your exposure. With the help of sophisticated resident screening programs that can assign levels of performance risk, your leasing agents will automatically know what security deposit level to require from A-credit residents versus B- and C-credit residents. The same would be true if you were to offer a security deposit alternative in the form of a surety bond in conjunction with the resident screening program. Having a standardized approach to offering security deposits and security deposit alternatives relative to applicant performance risk provides a level of coverage superior to offering a much-reduced security deposit as a rental concession. As a result, you can significantly and directly reduce the amount of your bad debt exposure, which will help improve your communities’ NOI. The lower-cost surety bond option is more attractive to renters and property operators in these challenging times because it lowers the cost of moving in.
drop by as much as 30 percent by this time next year, management and onsite leasing staffs need to work together to protect their NOI to safeguard their property’s valuation. • Leverage Best Practices – Successful businesses work to uniformly identify, adopt and adhere to best practices in order to achieve maximum operational, financial and risk management efficiencies. A standardized approach to leasing workflow processes is a good best practice to work towards, and given the marketplace conditions, a best practice that will generate both short- and long-term returns on investment. While standardizing leasing practices will deliver benefits in a down market cycle, they will also better prepare owners and property management firms to capitalize on future market upswings in the areas of rent increases, renter credit quality and traffic maximization.
Multi-Housing Needs to Focus on “Working Smart” While Waiting for Market to Turn Source: Erika Schnitzer, Associate Editor MHN Online
Every industry, including multi-family, is tethered to what happens in Washington, noted Jim VandeHei, co-founder and executive editor of Politico and moderator of the general session, “Knowledge is Power: How to Survive These Times,” at June’s National
Apartment Association Conference and Exposition. The panel featured Ric Campo, chairman and CEO of Camden Property Trust; Bob Faith, CEO of Greystar Real Estate Partners LLC; and Christopher Lee, president and CEO of CEL & Associates, a consulting firm that provides strategic planning, satisfaction surveys and compensation advice to the real estate industry. With this correlation in mind, the industry needs to embrace the facts and determine its strategy for the future. The next 12 to 18 months will certainly be challenging, but the industry needs to keep in mind that “real estate is a marathon, not a sprint,” asserted Lee. In the short term, the industry needs to “focus on working smart,” said Campo. He outlined steps his company has taken to cope with the chaos, including: start with integrity; stop listening to the whining competition; confide in your spouse or significant other; communicate all the time; and focus on the aspects you're able to control. The panel agreed that communication is key -- even more so in times of economic uncertainty. However, the modes by which people communicate have changed, and companies must adapt, particularly in terms of utilizing technology more, noted Faith. And, according to Lee, transparency and visibility are equally as important as communication. Meanwhile, between 2011 and 2013, new policies could place more emphasis on rental housing, as opposed to down payment assistance, Campo asserted. And, as Faith pointed out, there has
• Align Business Objectives – Aligning management level and community-level business objectives relative to standardized leasing practices means that everyone will be better positioned to work toward the same business goals, with greater clarity on how to get there. The number one objective in today’s environment has to be the preservation of property valuation, or at a minimum, the deceleration of the drop in property valuation. With valuations projected to 3
ACCESSLASVEGAS August | September 2009
historically been a correlation between the reduction of unemployment and a rising demand for apartments. Moving ahead, though, to 2010 and 2030, 72 million people will be seeking residences, and by 2030, there will be a need for 8.6 million apartments, equivalent to roughly $1 trillion. Lee attributed this to the growing Gen Y population, which tends to delay marriage and have more debt; thus, homeownership is projected to drop to 62 percent. Lee noted that every 1 percent decline in homeownership equates to one million new renters. Furthermore, the lack of new development will result in pent-up demand, while rents will start to increase in 2011-2012, resulting in great opportunity by the end of 2011. In order to prepare for the recovery, Campo said that his company has invested in improved revenue management and call systems. Faith noted that his company is in the process of fundraising and working toward land ventures. Both agreed that they want to be prepared for when the market does turn. Meanwhile, Lee advised tracking and understanding your target resident through research. When the panels were asked what keeps them up at night, Lee responded, “worrying that the industry will not do things differently.” He added that the industry tends to lose sight of on-site staff but that it is extremely important to motivate and train good people. In order to retain talent, noted Faith, ensure that your employees know your company’s vision and values, as well as opportunities that could be available to them.
Apartment Vacancy at 22-Year High in U.S. Source: Bloomberg.com
U.S. apartment vacancies rose to their highest in 22 years in the second quarter as job losses cut tenant demand and more units came to market. Vacancies climbed to 7.5 percent from 6.1 percent a year earlier, New York based real estate research firm Reis Inc. stated. The last time landlords had so much empty space was in 1987, when 4
vacancies reached 7.6 percent as the Standard & Poor’s 500 Index plummeted 23 percent in the last three months of that year. “Vacancies continued to rise despite what has traditionally been a strong leasing period for apartment properties,” said Victor Calanog, director of research at Reis. Job losses and falling wages are shrinking the pool of potential renters, defying forecasts that prospective homebuyers would rent rather that purchase as house prices decline. The U.S. unemployment rate rose to a 26-year high in June and U.S. payrolls dropped more than forecast in June, the government said last week. Equity Residential, founded by billionaire Sam Zell and now the biggest U.S. apartment landlord by market capitalization, said in April that job losses made the company “cautious” and it was offering rent reductions to lure tenants. Asking rents for apartments fell 0.6 percent in the second quarter from the first, Reis said. That matched the rate of change in the first quarter, the biggest drop since Reis began reporting such data in 1999. Asking rents dropped 0.7 percent from a year earlier to an average $1,040 a month.
technology companies or the housing boom. Rents paid by tenants climbed the most in Birmingham, Alabama; Chattanooga, Tennessee; Louisville, Kentucky; Norfolk/Hampton Roads, Virginia; and Syracuse, New York, according to Reis. The vacancy rate increased the most in Tucson, Arizona, by 1.5 percent to 9.9 percent, followed by Charlotte, North Carolina; Little Rock, Arkansas; and Richmond, Virginia, Reis said. Vacancies shrank the most in Columbia, South Carolina, by 1.2 percent to 13 percent, followed by New Haven, Connecticut; Colorado Springs and Birmingham, Alabama, the report said. New York had the lowest vacancy rate in the second quarter, at 2.9 percent, followed by New Haven, home to Yale University; Central New Jersey; New York’s Long Island; and Syracuse, New York, according to Reis. Jacksonville, Florida, had the most apartment vacancies, at 13.1 percent, Reis said. Next were Charleston and Columbia in South Carolina and Greensboro / Winston-Salem in North Carolina, said Reis.
The vacancy rate rose even as the net change in occupied space climbed by 2,530 units, Reis said.
Rents paid by tenants, also known as effective rents, fell 0.9 percent from the previous quarter to $975, said Reis. Effective rents were 1.9 percent lower than a year earlier.
A total of 22,696 units were completed last quarter, raising the total for the first half to 47,000, Calanog said. Reis expects more than 100,000 units to become available this year.
Effective rents fell the most in San Jose, San Francisco, Las Vegas, Southern California’s Orange County and Seattle.
“New buildings coming online over 2009 and 2010 will face higher initial vacancy levels, and will work to increase the pressure on leasing managers,” Calanog said.
Those cities had been boosted by
Modest Recovery Will Take Place in Apartment Market from 2011 to 2013
quarter this year, deliveries will be down to 40,000 units and 30,000 by end of the fourth quarter. Next year, this number is expected to drop down to 20,000 units.
Source: Anuradha Kher, MHN Online News Editor
1) Austin 2) Charlotte 3) Dallas 4) Las Vegas 5) Houston
“Last year the apartment markets looked fuzzy, and this year, it’s still a fuzzy picture,” Greg Willet, VP of research at MPF YieldStar, said at a session titled “U.S. Apartment Markets Outlook” at the RealPage User Conference held from July 13 to 14 in Dallas.
The 10 most active markets in terms of how their inventory is expected to grow: 6) Phoenix 7) San Antonio 8) Seattle 9) Denver 10) Raleigh
Everywhere in the country, there is minimal ongoing construction, and that situation will continue for a while. By 2010, the only exception will be Dallas, which will deliver 8,000 units. “Access to capital is a big problem, but past that, the challenge is that we have cut rents so significantly and no new development deals are going to pencil out at the rents we are getting. We think it’s going to be a while till we see some meaningful starts. Realistically, it’s going to be 2013,” said Willet. Demand Outlook: “It’s a much more complicated story, with several factors playing a role,” said Willet. What happens in the job market is the biggest question. Since the recession began, the country has cut more than 6 million jobs. It is a long way to go before there is any upturn in the job market. Most economists agree that somewhere between 2 to 3 million more jobs will be cut.
“There is a lot happening; there’s a lot of contradictory data and things are moving in different directions. While the economy is still deteriorating, we are seeing signs that things are going to be okay. The apartment market is still on the downward slope, and recovery depends on what happens in the economy.” Willet then outlined the supply and demand outlook based on data for the 64 metros YieldStar is monitoring. Supply Outlook: The past few years, for the nation as a whole, the apartment industry has tended to deliver about 50,000 new units every quarter. The middle of this year marks the end of that phase. At the beginning of the third
The second factor is that renters were lost last year to the shadow market. But now those properties are being foreclosed on so those people are returning to the apartment market from the shadow market. Florida and Las Vegas are examples of that. The third factor is that for many apartment companies, anybody is better than nobody, which means that companies have lowered standards on who is an acceptable candidate. “Lastly, rents have been cut so much that we are buying demand,” said Willet. Other findings Willet outlined are: Newly developed product has the highest vacancy, which means there is a long way to go until they achieve healthy occupancy rates. During a recession, people are supposed to double up, which means there should be higher occupancy in the
two- and three-bedroom units, but that is not the case. This shows that while there is doubling up, the apartment market is also losing people to the single-family shadow market. 2008 was "about" what happened with occupancy, but 2009 is about what will happen with rents. Effective rent was down 3 percent in the middle of the year for the nation as a whole. Willet revealed a handful of markets which have positive revenues tend to be very small markets. Dayton, Louisville, El Paso, Ft. Myers, Pittsburg and Oklahoma City all have positive revenues. Even though they are losing jobs, they haven’t lost a lot of jobs. Houston is basically flat on revenue basis, and Washington, D.C., Philadelphia and Boston are performing satisfactorily. In the middle are Florida markets including West Palm Beach, Orlando, Ft. Lauderdale and Tampa, which are getting some bounce back from the condo shadow market. Occupancy is getting close to stabilizing in these markets, but they are still undergoing rent cuts. San Francisco and San Diego, which are different from the rest of California, as well as Midwest markets including Chicago, Minneapolis and Detroit are also somewhere in the middle. The markets that are the very bottom are almost all the California markets with the exception of San Diego and San Francisco; Seattle; New York; and New Jersey. Willet said that the apartment industry on a national basis will hit the bottom in mid-2010. “For overall U.S., revenues will come down a little bit more, maybe somewhere around 2 percent, rents will be cut more and real recovery will take place between 2011 to 2013.” It is important to note that there are some unrealistic expectations about the comeback in 2011, said Willet. And even with recovery in process, there will be laggard markets in 2011-2013. Detroit, Cincinnati, Dayton, Louisville, St Louis, New York, Chicago, Los Angeles and Orange County will lag behind, and there will be notable momentum in Minneapolis, Atlanta, Houston, Orlando, Phoenix, Salt Lake City, San Francisco and San Jose, which will jump to the top of the list, according to Willet.
ACCESSLASVEGAS August | September 2009
Las Vegas Metro Occupancy Trends July 2008 through June 2009
93% 92% 91%
Source: CB Richard Ellis (104,535 Apartment Units Surveyed in June 2009)
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Multi-Family Snap Shot
Source: The Bentley Real Estate Group
FIRST QUARTER 2009 REVIEW The Las Vegas apartment market continued to report weakness during the first quarter of 2009 as occupancies declined, average asking rents struggled to keep pace with the prior year and market fundamentals remained depressed. Softness in the job market combined with eroding for-sale housing prices has contributed to a challenging environment for landlords within the apartment sector. By the close of the first quarter, occupancies reached an average of 91.3 percent, which reflected a decrease from the 92.0 percent reported in the preceding quarter (Q4 2008) and the 92.7 percent posted one year ago (Q1 2008). The latest occupancy figures represent the lowest level reported in more than a decade and well below the 10-year historical average of 94.3 percent. From a pricing perspective, the market retreated to levels reported in the fourth quarter of 2006, a period when economic conditions were much different. The average asking price per unit reached $868, which was 2.4 percent below the $890-per-unit price posted one year ago (Q1 2008). During the past three months, average pricing dipped from $881 per month. With average asking rents reaching $0.97 per square foot, the market reported the second consecutive quarter of year-over-year rent declines. MARKET OUTLOOK: THROUGH THE first quarter of 2009, economic conditions in southern Nevada eroded to levels not witnessed in decades. In relative terms, much of the ground gained remains in place, yet the declines from the peak are particularly difficult to manage. The impact of the current recession has affected the apartment sector, and will likely continue to put downward pressure on effective pricing and occupancies. A bottom and ultimate recovery in the single family market will put a bottom in the apartment sector in sight. Negative rent growth is likely to continue through the balance of 2009 as net population growth remains down to flat, the job market continues to adjust to new market realities and residential foreclosure activity continues. Occupancies will be less impacted as the apartment sector remains the lowest cost alternative for those displaced from their homes or forced to adjust their lifestyle to make ends meet. While the sector in not in the clear yet, a recovery in housing will likely precede the commercial sector. From an investment perspective, pricing will be dictated by lender sales and distressed transactions.
Access Investment Offerings COMMUNITY (UNITS)
PER UNIT PRICE
Winsome West Apartments (228)
Realty Executives / 702.743.8991
Somerset Apartments (40)
Steinberg Realty/ 702.738.0344
Evergreen Apartments (313)
The Apartment Company / 760.633.1864
Cameron Apartments (317)
The Apartment Company / 760.633.1864
Pine Village (275)
The Apartment Company / 760.633.1864
Sandpebble Village (280)
The Apartment Company / 760.633.1864
Summerlin Entrada Apartments (352)
Price To Be Determined By Market
BROKER / CONTACT INFORMATION
The Bentley Group / 702.855.0440
Access Recent Transactions COMMUNITY (UNITS) Sierra Vista Square (175)
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April 22, 2009 April 22, 2009
John & Judy Sanfilippo
Maryland Park (135)
Regency Heights (144)
April 17, 2009
GE Capital Real Estate REO
Paradise Square (146)
April 17, 2009
GE Capital Real Estate REO
Bella Estates (185)
April 17, 2009
GE Capital Real Estate REO
Eleven Eleven (113)
March 11, 2009
Marina Bay (192)
April 22, 2009
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Nevada State Bank REO
For additional information and / or broker information on Access Investment Offerings and / or Access Recent Transactions contact Bret Holmes at 702.699.9261.
ACCESSLASVEGAS August | September 2009
After A Very Long Wait, Juhl Quietly Opens Source says significant engineering problems plagued mid-rise Source: Tony Illia, Las Vegas Business Press
A city-backed mid-rise development in downtown Las Vegas opened in June with little public fanfare. The mixed-use residential project, dubbed Juhl, encompasses a full city block at 255 E. Bonneville Avenue, between Third and Fourth streets. The project was a victim of several construction setbacks that resulted in a 14-month late opening that has since diminished sales. The complex consists of six interlocking buildings with 341 condominiums in 120 floor plans. Only 21 homes, or 6 percent of the project, have closed escrow so far, Juhl Sales Manager John Eisle said. "With market conditions and underwriting guidelines having shifted, it has been more of a focus on helping existing buyers," said Eisle, who also serves as president of the Las Vegas High Rise and Condo Association, a local industry trade group. "We have 200 sales. We are closing five more units this week. Each escrow has its own anomalies." Juhl had its first sale in January 2006 when the high-rise condo market was red hot. Today's market paints a different picture. The project, which broke ground in mid-March 2006, was expected to open in April 2008. Its 14-month late completion is poorly timed. A deepening recession, rising unemployment, record foreclosures, and frozen credit conditions have since battered new home sales.
SoHo Lofts, Newport Lofts and Streamline Towers, Applied Analysis reports. Together, they have a combined 45 percent occupancy rate. SoHo Lofts is the most successful of the three. The $67 million, 17-story tower opened in early 2006 during the peak of the condo-buying frenzy. The 120-unit development at Las Vegas Boulevard and Hoover Avenue has only five units left. The $87 million, 23-story Newport Lofts at Casino Center Drive and Hoover Avenue, which opened in mid-2007, still has 35 percent of 168 units left to sell. The project was eventually foreclosed upon by its lender. Streamline Tower, meanwhile, has 90 percent of its 272 units remaining. The $150 million, 22-story high-rise opened at Las Vegas Boulevard and Ogden Avenue in early 2008. Juhl offers residences ranging from 600 square feet to 2,200 square feet in size, priced from the low $200,000s up to the $700,000s. The owner, San Diego-based CityMark Development, has since been offering discounts for those buyers who close escrow. The company won a request-forproposal to develop the 2.38-acre city-owned site, which is within the Las Vegas redevelopment zone. CityMark is credited with re-energizing downtown San Diego's Gaslamp Quarter. The company agreed to pay $5.2 million for the property, or $2.2 million per acre, in 2005. Under a development agreement, however, the company paid only $2 million in cash; the city is financing the rest. CityMark isn't required to repay the loan until 220 units are sold. "They have to pay off the note once two-thirds of the units have been sold," said Bill Arent, acting director of the city's redevelopment agency. "Then they must pay in full with 5.5 percent interest, which is our cost to finance." Juhl has suffered from construction setbacks. Its original price was $167 million; today, it's being valued at $178 million. New York-based Turner Construction Co. was the general contractor. Calls to Turner's local representative were not returned by press time. The project, which was designed by San Diego-based Martinez + Cutri Corp., with Vancouver, British Columbia-based Glotman Simpson as structural engineer, reportedly had significant engineering issues, said a source with direct project knowledge who requested anonymity. "There was no post-tensioning or reinforcing steel to support the concrete," said the source. "The floor slabs deflected two to three inches between the columns. It was so bad that the glass didn't fit, the interior walls were cracking, and water lines were breaking." But repairs have reportedly since been made.
"Today is a much different world than two or three years ago when many of these units were first contracted," said Brian Gordon, principal of Applied Analysis, a Las Vegas-based business advisory firm. "Much like the residential market, the luxury condo market segment has been affected by the downturn in the economy and weakening demand." Downtown now has 563 luxury condo units in three projects -8
"I'm not aware of any structural issues," said CityMark Vice President Russ Haley, who attributed the late opening to "typical project delays. He declined to elaborate further. Meanwhile, the source said: "I know both sides are preparing lawsuits against one another. It's a lot of finger-pointing." The city downplayed any project troubles. It has since issued permanent certificates of occupancy for Juhl. "There were some structural modifications made, some that were significant and some that were minor," Arent said.
Continued from Page 8 Residents began occupying portions of the building earlier this year. "It's nothing that you wouldn't see on any normal major construction project. It all got worked through," said the city's Chief Urban Redevelopment Officer Scott Adams. "We think, at the end of the day, we end up with a huge new project. We get a big, big shot in the arm in the revitalization of the area and in tax dollars. We are excited about it."
family earning $60,858 a year will pay $87 more a year in sales and car registration taxes.
Anderson, chief economist for the state Department of Employment, Training and Rehabilitation.
Larger businesses will be hit with more than 80 percent in business tax increases.
“High gas prices have a severe effect on tourism visitation numbers and could pose serious threats to an economic recovery going forward,” he said.
During end-of-sessions statements, Horsford and Buckley both defended the Legislature's decision to raise taxes. "I feel like we did our job," Horsford said. "We took a very difficult situation, the economy, the state having the worst budget (shortfall) in America ... and we were able to pass a balanced budget."
Employment in construction and in casinos and hotels in Clark County continued to fall in the month-to-month comparisons. The department said there were 76,700 workers in construction, down 700 from May and 19,000 lower than a year ago.
Buckley said Nevada was "facing probably the worst economic times the state has ever seen. At some point, we have to act like grown-ups," she said at the time.
The numbers working in hotel-casinos dropped to 154,900 in June or 800 fewer than in May. A year ago there were 170,500 people working in this industry in June.
In what seemed like a political campaign message, Governor Jim Gibbons said Wednesday that the "Buckley / Horsford Tax Increase of 2009" will hurt the Nevada economy and citizens who already are suffering because of the recession.
Jobless Rate Soars to 12.3 Percent in Las Vegas
Employment in manufacturing dropped by 100 workers to 23,900 in June compared to May.
"Working families are suffering through foreclosures, layoffs, higher gasoline prices and soon higher prices for electricity," Gibbons said in a prepared statement. "The sales tax increase is just another slap in the face to citizens who have already been forced to get by with less."
Unemployment soared in Clark County in June, with nearly 125,000 people out of work as the state continued on its record pace of unemployment.
Nevada Tax Increases Denounced Source: Las Vegas Sun
Source: Las Vegas Sun
An increase of 3 percentage points in the room tax rate in Clark County and a small part of Washoe County also went into effect Wednesday. A 10 percent increase in car registration taxes goes into effect September 1. A study by Jeremy Aguero, principal with Applied Analysis in Las Vegas, found a
The department reported the jobless rate in the Reno-Sparks area increased from 11.1 percent to 11.8 percent in June with 26,800 unemployed. That compares with June 2008 when there were 14,500 jobless. Unemployment in Carson City increased from 10.7 percent in May to 11.5 percent in June with 3,500 people out of work.
Most of the $1 billion in tax increases approved by the Legislature went into effect Wednesday. The state sales tax rate was increased by 0.35 percentage points, making the rate in Clark County 8.1 percent, one of the highest in the nation. At the same time, the payroll tax paid by businesses increased to 1.17 percent of each employees' wages, up from 0.63 percent. The annual business license fee was doubled to $200 a year.
One bright spot was in trade, transportation and utilities where employment rose to 155,500, up 300 workers from May.
The jobless rate in Elko and Eureka Counties rose from 5.9 percent in May to 6.6 percent in June.
The state report, released July 17, says the jobless rate in the Las Vegas area reached 12.3 percent in June, compared to 11.1 percent in the previous month. There were 124,900 unemployed, compared to 62,500 in the same month of 2008 and 12,500 higher than in May this year. For the second straight month, the state set a record in unemployment, rising to 12 percent with an estimated 169,800 jobless, nearly double the 87,300 of a year ago. “Nevada is experiencing the backlash from slowed consumer spending and declining visitor volume,” said Bill
Anderson said, “There is some sentiment that the U.S. economy may be near the bottom of the recession. Unfortunately May brought with it news suggesting that economic conditions in Nevada remain extremely weak.” He said employment historically is a lagging indicator of the economy’s health. “Hence, when a recovery does take hold in Nevada, labor market conditions will likely not respond immediately. This recession has hit the state extremely hard.” He said only six states in April had a higher jobless rate and the May figures have not been released by all states.
ACCESSLASVEGAS August | September 2009
Recession Proof Your Rent Payments
Measuring Your Property Management Company: Are They Working for You or Are You Working for Them? Source: Gabriele Preston
With unemployment still rising and a continued recession bearing down on the the remainder of 2009 no one is immune to the possibility of being laid off or terminated from their job. A growing number of residents believe their jobs are in jeopardy jobs and nervous about the future.
Resident’s can purchase as many policies as needed (for less than $80 per year) to cover their monthly rent payment. Well worth it in times like these. Owners and Managers can offer incentives as a way to encourage residents to protect their ability to pay rent in the event of a job loss.
2) Seek out local professional Resume When job losses occur many do not have Writers to help residents prepare their enough savings to survive the short term resumes. Similarly, bringing a loss of income. Their fear, lack of savings professional Career Coach to help residents determine their strengths and and the reality that unemployment benefits may not be enough to cover rent, career path will help them feel more confident about finding a good job utilities, food and other necessities often quickly. results in residents moving out voluntarily or worse being forced out of their homes through the eviction process. Instead of risking the loss of otherwise good residents here are 6 things one can do to support residents before and after job losses occur so that they can ride out the storm and stay in their homes.
3) Seek out local financial counselors to help residents develop an overall game plan and provide practical advice such as cutting out non-essential luxuries, putting together an emergency budget and saving more money to ensure financial stability.
1) Offer information about or access to renter’s insurance providers that provide an option for Renter’s Involuntary Unemployment Insurance. This optional coverage offers protection when the insured is affected by unemployment due to a lay-off or termination by an employer. One such provider offers a policy that features monthly benefits paying up to $500 per month for two months directly to the landlord.
4) Look for local and national charitable organizations that will offer emergency assistance to help pay rent, utilities and food. Communicate this information to help residents survive until they find a new job. Charities like the aforementioned are getting harder and harder to locate. Use the internet, your leasing staff and do your homework because they are still out there. You just need to use your resources and be
creative in locating this type of help. 5) Make it easy for residents to obtain roommates and / or transfer to two and three bedroom apartment homes to help them reduce their rent payments. Bring potential roommates together by advertising and hosting an informal meet and greet. Lose the application and transfer fees to entice people to stay or come to your community. 6) Give permission to waive late fees and extend rent due dates especially to those residents who have good credit and paid their rent timely in the past. Giving residents an opportunity to get back on their feet without penalizing them will strengthen ones relationship with them and return tenfold in customer loyalty and retention. These simple things will provide confidence and hope to residents through the tough times ahead. Short Bio of Author: Gabriele Preston, CAPS In 22 years of management achievement in multi-family housing, Gabriele Preston has learned what works . . . and what works best. Preston is the author of a regularly updated journal published by Multifamily Management Consultants. Preston holds a 60-hour certificate in business from Northwestern University and earned a Bachelor of Arts in economics from Western Michigan University. Preston co-authored a book entitled “Straight Talk on Multifamily Management” that was released in June of 2006. Her articles have appeared in Multi-family Executive, UNITS and Multifamilypro magazines.
Eight Simple Ways to Increase Your Online Rental Conversion Source: MultifamilyInsiders.com
1) List prices in your online ads. Properties that list their pricing get 192% more traffic than properties that do not. You will also end up pretty much dead last in the search results.
2) Put your floor plans in your online ads. Showing your floor plans can increase your traffic results by as much as 68%. And if you haven't bothered to get your floor plans digitized and colorized, there's no time like the present.
granted that people know you have air conditioning or an outdoor pool. If people knew exactly what you had, they would probably skip the online search and just come straight to your leasing office.
3) Interior photos are one of the most requested items on internet listing service (ILS) sites. Check to make sure you're not heavy on amenities and exteriors and neglecting your interior photos. And hey, spend some money on a good photographer too. It can make a huge difference in your photo quality.
6) Make sure you're not using your brochure copy for your ads. These ads are all crawled by the search engines, so use SEO friendly copy. This would be copy such as this:
4) Make sure you are using every available feature on the ILS sites. Can you bold your ad? Do it. Do they allow unlimited photos? Then get as many on there as you can. Call your ILS reps and ask them what you can do that you aren't currently doing with your ad. They are happy to help you. 5) Make sure you check ALL amenities that apply to you. Don't take it for
New Multi-Family Technology: Phone Applications Make Online Apartment Hunting Easier Source: Anuradha Kher, MHN Online News Editor
Apartments.com launched its new application for the iPhone on the Apple App Store. Renters can use their iPhone or iPod touch to look for apartments. The application delivers access to millions of apartments through location-based searches in a visually enhanced media format including walk through videos, photos, floor plans and integrated mapping. “Unique features like walk through videos, photos, floor plans and integrated mapping allow us to offer a superior apartment search experience for iPhone and iPod touch users,” says Chris Brown, vice president of product management at Apartments.com. “Apartments.com has provided access to its listings from all web-enabled phones including the iPhone since 2008. This app for iPhone and iPod touch is an extension of our
mobile strategy that enables us to deliver our listings in a multimedia format that will change the way users discover and rent property.” The Apartments.com application includes features like GPS technology for on-the-go renters looking for an apartment, saved search functionality providing renters with easy access to saved apartment searches and customized searches that allow renters to search by number of bedrooms, bathrooms, rent, pet policies, parking et cetera. The application is free of charge. Meanwhile, ForRent.com launched a ForRent.com T-Mobile G1 (GPhone) application. Similar to the Apartments.com application, ForRent.com’s free GPhone application allows apartment seekers to browse through apartment listings nationwide.
“One bedroom apartments for rent with washers and dryers in all homes. Garages with remotes are available. We are close to Route 59, I88 and the Metro Train to downtown Chicago.” Nope, it's not pretty but it gets the point across and it's SEO friendly. 7) Something as simple as offering to waive the application and/or admin fee if your prospect applies/reserves online can actually DOUBLE your results. 8) Video, video, video. Did we mention video? surrounding apartment communities. The GPhone runs on the new Google Android operating system and applications are distributed in the Android Market. The company launched its iPhone application earlier this year. “Mobile marketing is quickly spreading as a leading method of communication used to engage consumers,” says Terry Slattery, president of For Rent Media Solutions. “According to comScore Media Metrix, consumers downloaded 83 percent more mobile applications in March 2009 than in March 2008. We understand how much mobile Web impacts our consumers’ daily lives and will continue to explore opportunities with other mobile devices in the future.”
Users can also view apartment descriptions, videos, pictures, and floor plans, save their results, and contact the property. Consumers can use touchable map pins to click on a pin representing a property and go directly to the property's page. From the map, apartment seekers can zoom in and out to get a clearer view of the property and its proximity to 11
ACCESSLASVEGAS August | September 2009
“Green Initiative” Helps Owners Make More Green Over the past year the Las Vegas multi-housing industry has endured some serious hardships. In this challenging market, Advanced Management Group understands the importance of leasing, resident retention, and an overall well-managed operation. Their confidence and market stability has placed attention to service and detail which has elevated their owners assets. In order to help owners “go green” Advanced Management Group is offering new clients a FEE FREE month as part of their “Green Initiative,” a program designed to immediately increase the “green” in an owners bottom line. Advanced Management Group will give owners immediate access to their innovative approach to property management. With more than 40 years of property management experience, Advanced Management Group offers extensive market knowledge and consistent management principles. Advanced Management Group has utilized an innovative management fee structure, which incorporates accountability and a vested interest in the property owner’s bottom line. The results have been like no other management companies in Las Vegas. The fee structure is strictly based on the financial performance of owners properties they manage. This encourages superior property performance with a financial reward for everyone. For additional information and to begin your FEE FREE month of management contact Bret Holmes, President of Advanced Management Group, at 702.699.9261. For information, article consideration and featured columns ACCESSLASVEGAS can be contacted at 702.699.9261. The publisher of this newsletter is The Internal Press.
ACCESSLASVEGAS 2775 South Rainbow Boulevard, Suite #101-C Las Vegas, Nevada 89146