October November 2007

ACCESS LASVEGAS OCTOBER | NOVEMBER 2007

YOUR ACCESS TO THE LAS VEGAS MULTI-FAMILY HOUSING MARKET

Trump Luxury Invades Vegas Strip The Trump name is synonymous with luxury and that's exactly what real estate owners will find when they step inside their new high-tech Trump condominiums on the Las Vegas Strip. "The bar for elegance and luxury is being raised to new heights in Las Vegas," said Trump's Vice President of Development Brian Baudreau. Tower I of Trump International Hotel and Towers Las Vegas is scheduled to be completed in early 2008. Progress is now evident at the most exclusive address in Las Vegas.

Mature palm trees now grace the tower's massive recreation area located just above the building's main porte-cachere. Finishing touches are also being put on the heated pool, sundeck, cabanas and terrace. Trump's signature

24-carat gold glass has also been installed on the exterior of the lobby.

Trump International Hotel and Towers stands out from other resort properties along the famed Las Vegas Strip. The two million square foot, 64 story property is being built on the site of the former Frontier Hotel in partnership with casino developer Phil Ruffin. It is located in the heart of billion dollar re-development on the Strip. Next door on the site of the former Stardust Casino's 60 acres, Boyd Gaming is building it's newest casino venture called Echelon Place. Across the street, Wynn Resort's new Encore property is being developed. While the other structures will be massive, Trump

International's gold windows stand out from all the rest at the corner of Las Vegas Boulevard and Fashion Show Lane. From the outside, Trump I appears to be almost finished. Inside, interior decorators are putting the final touches on each of the resort's luxury units.

During a recent visit to the property, Donald Trump made several personal upgrades to the luxury condominium units including new furniture designs and carpeting. Each of the property's 1,282 condo units come completely furnished, so Trump wants his buyers to experience the ultimate in luxury living from the moment they step (continued on page 10)

ACCESSLASVEGAS October | November 2007

Should I Stay...or Should I Go Now?

By Gary Banner, CCIM, CRE

Like the old 1980’s rock and roll lyrics of The Clash (old school rock as my boys call it) real estate investors may soon be in a quandary. Where will real estate prices head next and what are the new rules of engagement for real estate investors? Many times clients and prospective customers will ask me, “Just where is the Las Vegas’ market in terms of a good time to buy, or has the best opportunities already past?” This is a common question I’m asked because my area of expertise lies in a niche market of multi-family investment brokerage, particularly properties that are well located in urban settings of the Class B/C investment category.

If I Go will there be Trouble?

To illustrate my opinion of where our local real estate market is headed next, many times I attempt to have the enquirer think in terms of cycles. Real estate cycles go beyond the typical local economic fundamentals that we brokers all have learned to quote off the top of our heads. Real estate cycle analysis attempts to put timing into the equation of real estate investments. We tout the many benefits of our robust economy that creates jobs and those jobs create renters, that’s what my clients are really the most interested in...Renters!

Very conveniently our minds can just visualize thousands of hotel rooms either in planning or in construction stages with development moving both north and south along the Las Vegas Strip, for decades to come! The City Center Project, the largest commercial development project in the United States today, is being constructed at a record breaking pace. The Frontier Casino Hotel just closed its doors this week to make way for a redesigned “Highest-and-best Use” development. It seems now almost weekly another Mega-Project is announced to bolster the Mega-Boom in the second redevelopment trend taking place on the Strip. This cycle of redevelopment ignites the local job creation cycle…which ignites the population growth cycle…until redevelopment cycle peaks and we begin the process over again with ever increasing tourist demand. Build it and they will come.

The whole world knows by now that our robust local economy is fueled by the dynamics of an ever recreating-its-self Las Vegas Strip. To observe these very smart corporate CEOs and CFOs that run today’s casinos increase their “Capital Spending” (spending on plant and equipment that increase production capacity…i.e. more hotel rooms) from their record breaking gaming profits is a very bullish long-term signal for local real estate investors. Follow the smart money to profits.

After I have convincingly explained to the client how great all these long-term attributes are for his or her next acquisition he or she still asks, “But Gary, where is the market headed today?” The real question they are asking is; “where are prices headed in terms of rents on my investment and potential capital gain on my equity?” “Tomorrow…not

“After I have convincingly explained to the client how great all these long-term attributes are for his or her next acquisition he or she still asks...where is the market headed today?”

- GARY BANNER OF COLDWELL BANKER COMMERCIAL

Four…Five…even Ten years from now. As you know Gary…you guys are constantly in the news everyday about all those homes for sale you can’t move.”

And if I Stay will it … Double?

There’s the Rub; one would have to conclude that anecdotal long-term fundamentals being spouted daily have nothing to do with the short-term movements in real estate prices and investor’s human nature that drives them. Like in any market, supply and demand at any moment in time can get out of balance; that’s what drives prices. Prices will cycle above and below the long-term secular-trend of a fundamental supply/demand driven market. This gyration in prices reverse at extreme peaks and troughs in investor demand by the law of “regression to the mean.” Prices eventually retreat or climb back to their long-term averages.

The public has been constantly pounded by the media on the local “Housing Bubble” which is not unique to Las Vegas but is occurring across the country. The forecast by Wall Street analysts and other “outside-our-market” experts warning of the Tsunami of foreclosures coming to our market, reversing all those parabolic appreciation gains made since 2003. Okay, it’s true there are over 23,000 homes for sale on the local GLVAR MLS and of those I estimate nearly 45% of them are vacant; however, most are owned by speculators who didn’t get out in time from the last boom and they are an excellent example euphoric speculation in the past real estate cycle. The data most important to my clients, apartment owners and investors, are the hundreds of “condo-conversions” that have returned from the resale market back to

ACCESSLASVEGAS October | November 2007

competing rental properties.

But not so fast! We also know real estate prices can raise very rapidly, but fall slowly during the down cycles. Prices are sticky on the way down. In the initial stages of falling real estate prices, sellers remain under an illusion about what their property is really worth. They keep a high list price on their house, reflecting what it was worth last year. I know people who are doing that now. This stubbornness leads to a drop in sales volume. At some point, a few owners cave in and sell at much lower prices.

Then others are forced to drop their prices too. What are the potential buyers thinking at this point? “Wow, prices are coming off…let’s not rush it. I’ll wait till they come down further.” The further prices fall, the more buyers want to wait.

It becomes a downward spiral.

So, if we can correctly identify a few cause and effect of the current real estate cycle. We can properly position ourselves to take advantage of the change in the market and profit.

So You Gotta Let Me Know…

In multi-family investing the best idea are acquisitions of Class B/C apartments in urban neighborhoods of Las Vegas. My reasoning is simple; these older properties are typically located closer to the strip and downtown with very valuable high-density zoned land under them. Additionally, they are the most affordable living still available in the metropolitan area. It’s no surprise to see these more affordable rents begin to climb in earnest, outpacing the luxury rentals. I believe the true leverage in rental growth rates will come from the lower more affordable rental apartments.

Demand is high for these properties and may in fact; increase as apartments lose fewer tenants to purchase homes that may fall further in price.

Class A new construction apartments are now renting in the $1.00 to $1.13 per square foot range. This will further pull affordable rents to higher levels which are usually at a 20% discount to the newer apartment properties rents in town. So investors should look for properties that can Pro Forma rents in the $0.90 per square foot range based upon their location and planned improvements.

The rate of change in rents should be stronger in the Class B/C category than Class A for some time to come. For the reasons mentioned above; there are over 23,000 homes for sale of which at least 10,000 of them may be for rent. The lack of demand has caused owners to drop their prices in order to cover expenses in ownership. Many of these homes are asking $1,300 or less per month which is equivalent to rents paid for a 1,100 square foot two bedroom two bath Class A apartment in Summerlin! I would imagine it will be difficult for Class A apartments to increase rents much further.

So there you have it…you are now in position to take advantage of current market conditions in Las Vegas. These are not the only ideas around…they are my own observations in a market I have spent the last xix years studying and brokering to my clients.

Gary is the managing director for Coldwell Banker Commercial ETN. He represents owners and investors in multifamily investment real estate and he can be reached at 702.940.8826 or e-mailed at gbanner@cbcetn.com.

All Bets Off for Las Vegas Housing Source: Chicago Tribune

The once-hot real estate market in this gambler's paradise cooled dramatically in the past year, forcing many to toss in their chips...

The upscale San Niccolo neighborhood to the south of this city's bustling Strip once offered the real estate equivalent of the town's loosest slots.

didn't ever live here. Now, they're totally walking away."

In these once-hot markets across the country, the real estate game has screeched to a halt, with unsold homes sitting idle, and buyers nowhere to be seen.

Under pressure to respond, lawmakers are struggling to fashion relief for strapped homeowners while avoiding an undeserved bailout for quick-buck artists caught in the same squeeze. Even as President Bush in a Rose Garden ceremony August 31 proposed aid for those threatened with losing their homes, he promised the government's role will be "limited."

Yet, if Las Vegas is any indication, sorting out the sympathetic hardship cases from those who gambled and lost could prove impossible. While the term "investor" brings to mind Warren Buffett, Vanguard or Fidelity, most of the real estate sharpies here were small-timers.

The typical speculator bought "one-sies and two-sies," before finally "getting caught with their pants down," said Frank Nason, president of Las Vegas real estate firm Residential Resources.

Those who failed to cash out ahead of the bust have left owner-occupants such as Lewis stranded in a lonely landscape.

Almost half of the 30,000 homes listed for sale in the Las Vegas metropolitan area stand vacant, said Nason, making it that much tougher to sell the rest.

"It's kind of a downward spiral," he said.

"In the next year or two, it could get a heckuva lot worse."

From her front door, Lewis stares across Arcata Point Avenue at the for-sale signs on two abandoned houses in foreclosure.

The house next door stood empty for months as well, until a couple of out-of-town cops started using it for an occasional vacation getaway.

Gamblers willing to bet on a property or two were rewarded with almost immediate payoffs. The guy who sold Karen Lewis her house for $435,000 in June 2006 raked in a $200,000 profit after holding it less than two years, she figures.

Between 15 percent and 25 percent of the homes in her 3-year-old gated community are for sale, she estimates, many behind on loan payments and an alarming number deserted, their lawns burnt out and trash untended.

"Houses were really cheap. Loans were really easy," said Lewis, who moved from California. "These were investors who

The same problem afflicts Summerlin, the Vegas suburb where Steve Forman's "beautiful, gated, golf-course

community" for the 55 and older set has "tons of foreclosures," he said.

"Nobody wants to live on a block with empty houses," said Forman, an apparel executive. "When people come to visit you and all they see are for-sale signs, it doesn't look good."

The Chicago market also is suffering a real estate hangover, as tighter financing puts an end to a period of excess. But it doesn't compare with the free fall in the ex-hot spots of California, Florida, Arizona, Colorado and, especially Nevada, the No. 1 state in foreclosures, according to the RealtyTrac data service, which ranks Illinois No. 15.

"There was a lot more speculation in Las Vegas than in Chicago," explained Paul Kasriel, chief economist at Northern Trust. "It's a gambling town. A lot of people rolled the dice on real estate, and it came up snake eyes."

Though spread unevenly, the dimensions of the bust are immense. This year alone, mortgage lenders nationwide will take the first steps to foreclose on as many as 1.2 million homes owned by deadbeat borrowers, according to RealtyTrac.

That 60 percent increase from 2006 "honestly could be a conservative estimate," said Rick Sharga, vice president of marketing at the research firm. "You're talking about a million people losing their homes."

The Mortgage Bankers Association, reporting on the rise in delinquencies and foreclosures, cited the higher risk of so-called investor loans made to buyers with no plans to live in the properties they purchased.

Nevada had more of those loans than any other state, and almost one-third of them were at least 90 days past due as of June 30, compared with 13 percent nationwide.

"These investors are much more likely to default on their mortgages if they see the value of their investments falling," the trade group said.

An estimated 2 million adjustable-rate mortgages, many with low initial "teaser" rates, will be resetting at higher levels in the coming months, ratcheting up the pressure.

Sympathies remain divided. Civil-rights

groups have called for a temporary moratorium on foreclosures, while conservatives such as tax watchdog Lewis Uhler want borrowers, as he put it, "held responsible for their own mistakes."

The Bush plan would permit strapped homeowners with strong credit histories to refinance into loans insured by the Federal Housing Administration. But those loans come with restrictions, and the immediate outlook for government aid suggests no relief any time soon.

That spells trouble for the most vulnerable homeowners with low incomes, weak credit scores and costly subprime mortgages. But folks who make a good living have overextended, too, and some blame deceptive sales practices and hidden pitfalls for their home-loan bind.

“There was a lot more speculation in Las Vegas...it’s a gambling town. A lot of people rolled the dice on real estate and it came up snake eyes.�

- PAUL KASRIEL, CHIEF ECONOMIST AT NORTHERN TRUST

"When they do your mortgages here, they tell you one price, and when you get your bill it turns out to be another," said Jeff Brink, 46, a bus driver who lives in the Vegas suburb of Henderson. "That's what happened to me. It's outrageous."

Told to expect a $1,300 monthly payment on the $278,000 home he bought in April, he was shocked when the first bill came for $1,938, the 16-year Vegas resident said.

industry. Casinos, hotels and restaurants along the Strip teem with free-spenders, and the area's robust economic growth promises to mitigate the residential real estate fallout for those with the staying power to hang on. Giant building projects dominate the Vegas skyline, including the $7 billion MGM City Center mega-resort. Tens of thousands of new hotel rooms will be coming on line in the next year or two alone.

Developer Rich Gustafson, for one, is not worried. His 15-story Juhl condo tower in downtown Vegas is 70 percent sold with almost a year to go before completion, he said, at prices ranging from the high $300,000s for a studio to $1.5 million for a spacious penthouse.

His buyers have put down large deposits for their in-town urban digs and show no sign of backing out en masse, he said.

"The market's difficult, but we're actually doing pretty well. People still have to live someplace," Gustafson said.

Devin Reiss, president of the Greater Las Vegas Association of Realtors, expects the city to lead the eventual comeback in residential housing because of its strong local economy. Until then, however, these will be lean times for his 17,000 members.

Excluding new-home sales and sales by owner, just 2,000 transactions were recorded in July, less than half peak levels. The sluggish pace has put pressure on practically every related occupation, including builders, construction workers, loan officers and marketing teams.

Job losses from the housing bust could work against a swift local recovery, even with the tourist business going strong, some warn.

Wages certainly aren't keeping pace, Brink said. "It's like you're moving on up, but you're moving on out."

"There's a lot of denial out there," said Nason, the Vegas real estate executive.

"I don't find people coming to grips yet."

While the boom-and-bust markets get most of the attention, the rate of foreclosures in Ohio, Michigan and Indiana ranks close behind, mostly because their troubled manufacturing economies compound the problems of the credit crunch, a factor in Illinois as well.

Lewis, a software consultant whose engineer husband works for a water treatment company, said she intends to stick it out.

The salvation for Las Vegas lies in its fast-growing tourism and gaming

Bad as it is for real estate, she said, "The market's really good here for work."

Anyway, she added, "I'm sort of stuck. If I were to move, I would take a bit of a loss."

ACCESSLASVEGAS October | November 2007

Las Vegas Ranks #1 for Overbuilt Markets in 2007

INVESTORUPDATE

Source: NuWire Investor

Las Vegas created a vacuum, sucking rents down and blowing up vacancy rates for both housing sectors of the market.

As the U.S. mortgage lending crisis expands, many investors are turning to the multi-family market, as those who can no longer afford or qualify for a mortgage wind up renting. But in some areas, the multi-family rental market is doing just as poorly as the single family market, or worse. There are a few locales where overbuilding of single family homes and multi-family units (apartment buildings, condominium complexes, townhomes, et cetera) has instead created a vacuum, sucking rents down and blowing up vacancy rates for both sectors of the market.

In an overbuilding situation, developers see an attractive market and build until the inventory of new construction combined with the inventory of current dwellings can’t be absorbed by population growth, at which point the market stagnates or is completely soured. Over time these markets should recover because there was a reason for developers to build there in the first place, whether it was population growth, climate or some combination of demographics that signaled a prime market for building.

The correction to the market can be overdone as well, so they shouldn’t be ruled out entirely, because a savvy investor can get in near the bottom of a post-overbuilding bust. But it can be a long, slow wait for a market to recover from an overbuilding phase.

The Not-So-Wonderful #1 Overbuilt Market - Las Vegas This city has seen a huge boom in new home construction.

72,965 permits were issued for residential construction during 2005 and 2006, according to the U.S. Census Bureau. But the inventory of homes for sale on the MLS reached a record 23,642 in June and 40 percent of those homes are vacant, according to the Associated Press. New home sales through May were down 43.8 percent in Las Vegas from a year ago, according to Home Builders Research.

Las Vegas also overbuilt its condominiums and townhomes.

Condos and townhomes are spending 335 days on the market, Sean Brown, an advisor with the National Association of Residential Real Estate Investment Advisors, said in a statement.

Meanwhile, the average single family home is spending 115 days on the market as of May 2007, according to Zip Realty.

Further, new home closings slid down 48 percent during the first six months of 2007, according to SalesTraq.

In the apartment market, while the occupancy rate dropped 0.6 percent between 2005 and 2006, the rental rates for apartments rose 3.1 percent during the same period, according to M/PF YieldStar, which places Las Vegas squarely in the middle of the rate changes in cities across the country.

However, sticky the housing situation is in Las Vegas right now, the city is continuing to grow at a rapid pace, which should help when the time comes for a rebound. The Census Bureau estimated that the metro area has nearly 1.8 million people. Recovery from this overbuilding phase is likely to come faster here than in any other city on this list.

The remaining markets are: 2.

3.

4.

5.

A few of these locales should be familiar to investors, places such as Miami and Phoenix, where the media has extensively covered the overbuilding phenomenon. Though those cities are noteworthy for the condo boom that sent rental rates and housing prices spiraling down, there are a number of other markets where similar booms and busts are pounding down the rental rates.

Phoenix, Arizona Orlando, Florida Miami, Florida West Palm Beach Florida

West Palm Beach, Florida is suffering from the bubble burst felt throughout Florida. When three of the top 5 overbuilt markets are in one state, it is certain that many smaller markets in the state suffer from similar problems. And Phoenix, Arizona has long been touted as a retirement haven, but not enough retirees are flocking to the city to overcome serious vacancy and overbuilding problems.

While all of these problems highlight a soft 2007 housing market, real estate is cyclical and for some investors that cycle better turn from overbuilt to over-rented real soon...

ACCESSLASVEGAS October | November 2007

SPECIAL REPORT: Many Needy People: Housing Help Goes Unused in North Las Vegas Source: Las Vegas Sun

Refugees from West African civil wars. Divorced grandmothers living with friends. Homeless men. People with Los Angeles area addresses.

These were some of the 1,896 people in line in the January chill at the North Las Vegas Housing Authority two years ago, hoping their names would be drawn from a barrel so they could get on a waiting list for federally subsidized housing.

Nearly three years later, a federal inspector general’s audit reveals that even those who got on the Section 8 voucher waiting list that day - as well as hundreds of families in the Las Vegas Valley - probably never got into subsidized housing.

The U.S. Housing and Urban Development audit, released this month, revealed that $4.4 million in public money went unused

SPECIALREPORT

“That audit is going to trigger another audit, which will trigger another audit. You could still do everything and be shut down,” he said.

The Section 8 program is the North Las Vegas Housing Authority’s largest program. The vouchers may be used to rent apartments anywhere in the valley, provided landlords accept them. People receiving vouchers are expected to spend 30 percent of their adjusted gross income on rent. There is no limit on how long people may stay in the program, but housing authorities check people’s income and other conditions every three months to verify that they still qualify.

The federal audit looked at the North Las Vegas program from January 2005 through March 31, 2007. During that period, the housing authority got $26.1 million in federal money for 1,371 vouchers. Some of those months, hundreds went unused, a total of $4.4 million worth.

England said that happened because the authority was understaffed. He also said required background checks were taking months to complete.

In recent months, he said, the program has improved, with nearly 95 percent of its vouchers in use. The background checks are now outsourced, he added. Though the checks now rely on Social Security numbers instead of fingerprints, the private sector can turn them around in 24 to 48 hours; the federal government was taking up to six months, England said.

Montandon said the background checks point to a problem in the program. The City Council’s role as housing authority board is a two-edged sword, he said, because he and other council members regularly receive complaints from constituents who have Section 8 voucher holders as neighbors.

during a two-year period, meaning that people eligible for the vouchers didn’t get them.

“The housing authority vouchers sat in the office and were not used,” HUD spokesman Larry Bush said.

Apart from highlighting implications for families across the valley, the audit calls into question the housing authority’s future, because its board and staff see a plot to shut down the agency. Housing Authority Executive Director Don England said Wednesday the audit was “accurate.” “We weren’t processing them as fast as we could have,” he said. The result: “Many that could’ve gotten housed didn’t get housed.”

The audit, dated September 4, was the subject of a special housing authority board meeting Tuesday. The mayor and the rest of the City Council form the board.

Mayor Mike Montandon said shortly before the meeting that he thought the audit, although correct in its conclusions, reflected a “bigger picture.” He said federal officials had told him, “We want to shut you down.” HUD, he said, wants to close smaller housing authorities nationwide, and North Las Vegas’, the smallest of three in the valley, is on some list somewhere. Montandon thinks the federal government will visit the housing authority again.

He said the housing authority needs to be as thorough as possible with background checks, and, even then, some families take advantage of the program. “I can drive you out there and find a family that’s giving me the finger and saying four-letter words, living with three other families - because we failed in our background checks.”

ACCESSLASVEGAS October | November 2007

OCCUPANCYCORNER

Las Vegas Metro Occupancy August 2006 through July 2007 100% 98% 95.51%

96%

94.10%

94%

93.84%

93.42%

92.90%

92.82%

92.58%

92.85%

92.56%

92.44%

92.17%

92.26%

92%

Source: CB Richard Ellis (101,204 Apartment Units Surveyed in July)

Ju ly

Ju ne

ay M

il Ap r

ar ch M

y ua r Fe br

Ja nu a

ry

20

07

be r D

ec

em

be r N

ov em

r ob e ct O

em Se pt

Au g

us

t2

00

6

be r

90%

ACCESSLASVEGAS October | November 2007

MARKETACCESS

Las Vegas Snap Shot KEY INDICATORS

Source: Red Capital

1Q 2007 RESULTS

YEAR OVER YEAR CHANGE

2008 OUTLOOK

Vacancy Trend

5.1%

up 1.2%

SMALL INCREASE

Effective Rents

$799

up 4.4%

SMALL DECREASE

Cap Rate

5.5%

up 0.2%

STABLE / DECREASING

932,400

up 31,500

SMALL DECREASE

Employment

Access Investment Offerings COMMUNITY (UNITS) Wynn Palms (554)

ASKING PRICE $ 57,750,000

PER UNIT PRICE BROKER / CONTACT INFORMATION $ 104,242 Colliers International / 702.735.5700

Parkway Manor Apartments (176)

$ 29,000,000

$ 164,772

Sperry Van Ness / 775.883.3936

Brittnae Pines Apartments (208)

$ 26,250,000

$ 126,202

National Properties, LLC / 702.376.4305

Emerald Suites Cameron (96)

$ 11,750,000

$ 122,396

The Bentley Group / 702.855.0440

Elmwood Villas (156)

$ 11,500,000

$ 73,718

The DT Group / 818.286.1209

Golden Pond (126)

$ 10,962,000

$ 87,000

Elite Realty / 702.595.7988

Palm Hills (113)

$ 10,750,000

$ 95,133

The DT Group / 818.286.1209

Access Recent Transactions COMMUNITY (UNITS)

CLOSING PRICE

PER UNIT PRICE

CLOSING DATE

BUYER

Summerhill Villas (440)

$ 52,000,000

$ 118,182

August 3, 2007

Artisan Real Estate

Adobe Ranch (234)

$ 35,445,340

$ 151,476

August 2, 2007

Capri Capital Partners

Bacarra (180)

$ 27,700,000

$ 153,889

July 11, 2007

RW Selby & Company

Loma Vista (393)

$ 42,000,000

$ 106,870

June 29, 2007

National Commercial

Avery Park (320)

$ 27,600,000

$ 86,250

May 31, 2007

The Prime Group

Spanish Oaks (216)

$ 18,650,000

$ 86,343

May 31, 2007

Artisan Real Estate

Sunrise Meadows (896)

$ 103,000,000

$ 114,955

May 29, 2007

Bean Investment

For additional information and / or broker information on Access Investment Offerings and / or Access Recent Transactions contact Michael Fazio at 702.755.7477.

ACCESSLASVEGAS October | November 2007

Atrium Suites Sells for $50.5 The Benefits of Renting Million, Undergoes Makeover in Las Vegas Source: Las Vegas Business Press

Source: ManagingMoney.com

The Atrium Suites Hotel at 4255 South Paradise Road is getting a facelift. Asia Pacific Capital Co. and Financial Capital Investment Co., recently bought the 202-room, non-gaming hotel for $50.5 million. The company principals are Eddie Chao and Richard Alter. Both are based in Los Angeles. Chao also controls Alhambra, California-based Candet Properties.

We ran across an article recently that provided some arguments for renting instead of owning a home. In a market flooded with properties for sale, perhaps there’s some wisdom to this type of approach.

The duo plans to spend roughly $15.5 million to upgrade the 18-year-old, 3.75-acre property, which is located adjacent to the Hard Rock Hotel Casino. Holliday Fenoglio Fowler LP arranged the three-year, adjustable-rate $66 million loan for acquisition and improvements through Lehman Brothers.

"The borrower plans to transform this property into an exclusive, high-quality luxury boutique hotel, which will feature personalized service in an intimate atmosphere with an edgy, modern design and a trendy pool and bar scene that will be the center of entertainment at the hotel," said Xavier Sheid, managing director of Holliday Fenoglio Fowler's San Diego office. "This concept will appeal to the young, affluent customer who desires upscale luxury lodging in a non-gaming environment."

The article, from ManagingMoney.com, highlights the pros and cons to renting versus owning.

If you’re like most people who purchase a home with the intent to sell it after five or seven years, your monthly mortgage payments, about 80% of them according to the article, will go towards paying interest. Not exactly an equity building proposition.

And any equity you do build may be eaten up by repairs, taxes and the cost of selling the home.

If you find yourself in an uncertain employment situation, renting has even more positives, since it’s often a short-term situation and wouldn’t require selling a home in a market with 25,000 other homes for sale.

Some homeowners find themselves in homes that are just too expensive for their income with an adjustable mortgage that keeps going up, and thus the record number of foreclosures in Southern Nevada.

And while housing prices soared, the article points out that rents have merely chugged along. Between 2004 and 2006 home prices nationwide rose 16%, while rents inched up just 1.2%.

HOTHEADLINES

So, if you can satisfy your needs by renting a house at $1,000 a month instead of paying a $2,500 a month house payment, then that’s $1,500 a month you can invest elsewhere. Add the $10,000 or $20,000 you would have put up for a down payment and that investment turns into a healthy nest egg.

After a few years if you decide it’s time to buy a house then you have enough saved for a healthy down payment.

The rule of thumb for home ownership is that the average homeowner should set aside 5% of the home’s purchase price to cover maintenance and repairs, plus utilities.

The property will be renamed the Paradise Boutique Hotel, and will feature large king- and queen-size suites, all equipped with full wet-bar entertainment areas, audio/video systems with flat-screen televisions, wireless internet, "sleek and sexy" bathrooms and many other in-room amenities.

Amenities will include a lobby, lounge and bar area, an upscale New York-style destination restaurant and cocktail bar, a landscaped and expanded pool deck with pool bar, lounge, cabanas, entertainment amphitheater and spa area, and a nightclub/lounge. The makeover is expected to finish in late 2008.

A monthly house payment, including taxes and insurance, should be no more than 33% of your monthly income, and your bills should not exceed 38% of your total pay to play it safe. Some lenders have fudged the rules and we’ve all seen the repercussions in the mortgage industry.

So just remember, even if you dream of home ownership you need to make sure the time is right for you. For some people waiting even a few years can mean the ability to buy with more stability in their lives, a larger down payment, and lower prices in a buyer’s market.

ACCESSLASVEGAS October | November 2007

Apartment Renters Continued: Told to Move in 30 Trump Luxury Days...Again Invades Source: LasVegasNow.com Las Vegas For the second time in a month, people living in short-term apartments are being told to find somewhere else to live because the land under them is valuable and has been sold for development.

Nearly 200 people living in the Blue Harbor apartments near Sierra Vista and Swenson have one month to move out because the apartments are being torn down to make way for a parking lot. The valuable property sits close to the Las Vegas Strip.

Continued from Cover Story

inside their new home. One such upgrade includes the addition of high-tech television mirrors. Instead of installing flat screen televisions inside each bathroom at Trump I, televisions will be built inside the actual bathroom mirror. Jim Mischele, President of Electric Mirrors, designed the new technology. "Our television mirrors are designed as one complete unit with

A similar situation happened earlier this month when Harrah's bought land at Koval near Sands, displacing about 700 people living in the Desert Club and Winnick Holdings apartments.

Debbie Limes is one of the residents of Blue Harbor that must find a new home.

She greets her 4-year-old daughter Kaitlin with smiles but inside she's worried where they will go.

"We live paycheck to paycheck. I know a lot of families here who struggle as it is and to just put us out like this. All they care about money," she said.

Lime is referring to the sale of the land that Blue Harbor apartments sits on. The Las Vegas Convention and Visitors Authority bought the 8.4 acres for $50 million and the plan is to add parking and exhibit space.

"I want my daughter to stay in the school she's in and she's not going to be able too. With her being disabled, the change is hard on her," Lime said.

Fifty-four-year-old Bill Vansford is also facing the same situation. He lives in an apartment nearby. "It's depressing because Vegas doesn't care about its people, the little people. I am on a fixed income social security disability. I don't know where to go. This is the third time," Vansford said.

The LVCVA is working closely with the owners of Blue Harbor apartments to provide a smooth transition.

speakers installed right into the piece.

This will debut at the Trump International in Las Vegas, offering guests something that they truly can't see anywhere else." The technology will be used first at Trump I Las Vegas, then at other Trump properties in Chicago and New York.

Some of the other amenities that Trump I residents will be able to enjoy include: floor-to-ceiling windows, marble entrance ways, granite countertops, marble vanities and spa tubs. All guests have access to 24-hour concierge service, as well as polite doormen and a valet. Trump International will also feature a signature restaurant offering the finest cuisine, as well as a salon and spa and a business center.

Nearly all of tower one's condo apartments are sold. Buyers can choose from several floor plans including studio and one bedroom units, as well as one-, two- and three bedroom penthouse suites. Prices range from $700,000 to $7 million dollars. When buyers purchase a unit, they have the option of living there full time or part time. If they choose to

rent out the unit when they're not living there, they can rent it out through Trump hotel operations or use a private outside management company.

Those interested in purchasing a unit at the Trump International Hotel and Towers can visit the sales office located at 3128 Las Vegas Boulevard South.

There, potential buyers can even visit furnished models of the units. Tower I has several units left for sale. Tower II is still in the very early stages of development; however, reservations are currently being taken for units.

The Trump International Hotel & Tower Las Vegas is a 64 story hotel condominium (condo-hotel) under construction on Las Vegas Boulevard in Clark County, Nevada named for famed real estate developer Donald Trump. It is being built across the street from Wynn Las Vegas on 3.46 acres of the New Frontier Hotel and Casino. It will feature both non-residential hotel condominiums and residential condominiums.

For more information on either tower, call 877.878.6711. You can also e-mail the sales office through their website at www.trumplv.com.

ACCESSLASVEGAS October | November 2007

Customer Service 101: Reach Out & Touch Your Residents Phase I of a 5 Phase Series for Leasing Consultants and Managers

PROPERTYTIP

Phase One: A Personal Visit Within the first 10 days a new resident moves into your community you need to take the time to visit them, personally.

This is the most important part of the new relationship between the resident and management. This visit will let the resident know you mean service, how often people give lip service only! This is not a REAL surprise visit, call first and ask if a visit within the next hour would be convenient. Take an unexpected gift along. You will need service requests and maintenance “tips.” Make sure everything is okay in the apartment, walk through and check again personally. A gift of a fresh herb or mint plant (small) might be the final touch for your

Is Multi-Family Going “Green”?

Given the environment these days - a world of rising energy costs, consumer concern about climate change, and federal and state tax incentives for energy efficiency - it's no wonder that green is such a fashionable color.

But what exactly defines a "green" multi-family building? That's a question many apartment firms have been struggling with. As the industry explores green development practices, it has quickly discovered that there is no such thing as a multifamily green building standard. Several nationally recognized green building programs, including the U.S. Green Building Council's (USGBC) Leadership in Energy and Environmental Design (LEED) program, Green Globes and Enterprise's Green Communities, offer design guidelines,

resident. It says “we care” and it shows!!!

Educate your residents, spend some time explaining maintenance “how-to’s” and give them a card with the phone number on it. Encourage your resident’s use of community services such as banking facilities, dry cleaning, supermarkets, restaurants, et cetera.

Make notes on a calendar for your follow up visit. This visit will establish a trusting relationship and let your residents know you really mean what you say! Ask if everything is okay in the apartment. If not, fill out the necessary service request while the resident watches, then follow up!!!

but all are generally a poor fit with most apartment construction.

LEED, for example, was originally developed with high-rise commercial properties in mind, and the USGBC has only recently turned its attention to residential development with its LEED for Homes rating system. Even LEED for Homes, however, was designed for single-family construction; it remains unclear how the system will address multifamily buildings.

Help is on the way, in the form of a new National Green Building Standard (NGBS). This new standard is set to debut in 2008 as the first green building standard developed through a nationally recognized consensus process and it specifically addresses multifamily construction.

The multi-family future looks “green”, stay tuned and focus on it!

FUTUREFOCUS

ACCESSLASVEGAS October | November 2007

Advanced Management Group Celebrates One Year Anniversary Advanced Management Group, developer of Access Las Vegas, celebrates its one year anniversary on November 1st, 2007. Advanced Management Group Nevada, LLC is a real estate management company providing advanced property management, financial and accounting, and asset management services for multi-family properties in the southwestern United States. Specializing in each of these facets, Advanced Management Group strives towards excellence, with a foundation built on a close personal interest to our owners and owners’ assets. Advanced Management Group manages and consults for over 2,000 units currently in Nevada and Arizona. For additional information regarding the services Advanced Management Group provides visit www.amgnevada.com.

Access Las Vegas ensures accurate market information, industry articles and multi-family housing trends that are delivered with flawless precision. The multi-family housing industry changes quickly and we do not want owners or asset managers to fall behind. Financial success depends on staying ahead of changes. So Access Las Vegas, and leave the rest to us...

Advanced Management Group can be contacted at 702.699.9261. For information, article consideration and featured columns Access Las Vegas can be contacted at 702.755.7477. The editor of this newsletter is Michael Fazio.

ACCESSLASVEGAS 8550 West Charleston Boulevard, Suite #102 Las Vegas, Nevada 89117