One group of analysts expects improvements in the Las Vegas retail market through the end of the year — but conditions will remain difficult for certain properties.
Brokerage Marcus & Millichap says in a new report that continued increases in the city’s tourist count will help drive a 4.5 percent increase in retail sales.
''Areas near the Strip and desirable portions of the valley, including Summerlin and Henderson, will outperform'' the rest of the metro area, the report said.
Marcus & Millichap noted in the report that the recession had driven the local retail vacancy rate to a 30-year high of 12.2 percent in last year’s third quarter, but by this year’s first quarter the rate had declined to 11.9 percent.
For property owners and landlords, this generally means they’ll be able to raise rents and fill some empty space, the report said.
''Increased tenant demand and a dearth of speculative development will lower the overall vacancy rate in the Las Vegas metro area to 11.7 percent in 2012,'' the report predicted.
The projected improvements will be spotty in the Las Vegas Valley. Some of the better-performing areas will be Henderson, currently with a vacancy rate of 9.8 percent, and Northwest Las Vegas, with a rate of 11 percent.
The southwest area, laboring with a 13.1 percent vacancy rate, is struggling because of a glut of foreclosures that followed rapid residential development there during the boom years.
''Many homes still sit vacant as problems in the housing market are sorted out,'' the report said.
Some positives in the overall market mentioned in the report include:
• Tivoli Village at Queensridge in the Northwest is expanding.
• The Stephanie Beltway Plaza in Henderson is undergoing a revival.
• WinCo entered the market with two grocery stores.
• Firestone, the Container Store, Swarovski and Papyrus have all entered the market.
The improvements locally, however, can’t mask the fact that the projected 11.7 percent vacancy rate is sky-high compared to the boom years of 2006 and 2007, when it ran between 3.2 percent and 4.1 percent.
Las Vegas has also been hit harder than other cities, with Marcus & Millichap pegging the fourth quarter 2011 vacancy rate here at 12 percent versus the average of 9.7 percent in other large markets.
And with the local economy still struggling with 11.6 percent unemployment, the second highest in the nation among large cites, and ranking No. 7 for foreclosures, there’s been no known movement on re-starting construction of projects like the stalled Shops at Summerlin Centre, now a steel skeleton sitting south of Red Rock Resort on the Las Vegas Beltway, or a 1 million-square-foot mall Taubman Centers Inc. had discussed four years ago as potentially being part of the M Resort in Henderson.
Banks and investors in distressed debt, in the meantime, appear to be as busy as ever in filing foreclosure and receivership lawsuits against local retail property owners that default on mortgages.
One of the busier debt holders in this field is an entity called 2010-1 CRE Venture LLC, which was created by the Federal Deposit Insurance Corp. to take over some of the loans at failed banks including Community Bank of Nevada and Silver State Bank.
Among the 2010-1 CRE Venture lawsuits this year, two were filed since May 31 against the same group of investors who own small retail projects in Henderson and North Las Vegas.
These investors include The Windsor Group LLC, Herman Eminger and Roy Holt.
One suit is over a loan for property at 2800 E. Tropical Parkway in North Las Vegas, where an America’s Mart convenience store was built.
The suit says the investors’ company, Tropical Point LLC, has defaulted on a $4.145 million loan issued in 2005 by Community Bank of Nevada.
The suit alleges breach of contract and asks that a receiver be appointed to take over the property to run it while CRE Venture pursues a foreclosure.
A second lawsuit was filed against another company owned by the same investors called Spencer Crossings LLC.
Spencer Crossings is accused of defaulting on two loans totaling $11.2 million issued in 2007 by Community Bank of Nevada.
That loan is backed by property at the intersection of St. Rose Parkway, Spencer Street and Cactus Avenue in Henderson. Some of the land is vacant, and developments there include another America’s Mart and a Fireside bar and grill.
That suit also asks that a receiver be appointed to run the property while foreclosure proceedings are under way.
A request for comment was placed with Eminger.
Another 2010-CRE Venture lawsuit locally this year involved the Ann Marketplace retail center at 2696 W. Ann Road in North Las Vegas, which was turned over to a receiver.
The receiver has reported the 23,248-square-foot center is just 27 percent leased with 16,900 feet sitting empty.
CRE sought a receiver in a lawsuit revealing foreclosure proceedings were under way.
The suit also alleged investors including Barry Ford had defaulted on a $4.35 million loan against the property issued in 2004 by Community Bank of Nevada.