VEGAS INC archives
Lance Bradford has a good feel for the Las Vegas business climate.
Bradford crunches numbers under one of his hats and is a developer under another—a rare perspective in the market.
The owner of Bradford & Company CPA, which dates to 1992, Bradford founded Stable Development in 2005 to promote his unique building model for Las Vegas.
Bradford is one of few developers building office space in Las Vegas in a market that’s saddled with a nearly 25 percent vacancy rate. He develops partnerships with tenants who retain 40 percent ownership stake and sign ten-year leases.
During the past three years, he has opened a six-building complex on 12 acres at the Las Vegas Beltway and Sunset Road in the southwest valley. Bradford primarily caters to the medical community, which represents 60 percent of his tenants. His seventh building is near St. Rose Dominican Hospitals, Siena Campus, in Henderson, and two medical office buildings are under construction in Seven Hills near the hospital.
His CPA firm with 50 employees does taxes and consulting work and provides chief financing officer resources for companies. He represents such companies as waste management firm Republic Services, Rockstar Energy Drink and other smaller gaming companies.
What is your niche as an accounting firm?
A lot of growth companies don’t have a chief financial officer. They’re always dealing with banks and growth and have that 24-7 need but many don’t spend the $200,000 to $250,000 a year it often takes to compensate a CFO. We found a niche and mastered how to play all or part of the CFO role for them until they hire.
What do you do for them?
In general, financial reporting in real time, financial decisions and buy analysis, and analysis for feasibility and adding staff or a new segment. We help them with issues like loan modification and business restructuring.
How has your firm fared during the recession?
We’ve grown in the past two years. With the tougher economy, companies are less apt to hire, and they use us as needed. There are more situations now where they need to rely on the advice of an expert in the financial arena.
How is it going with business bankruptcies?
We saw a lot more from 2008 to 2009, and it’s starting to taper off now. I hope the worst is behind us. The table is getting set for some great opportunities to happen with new businesses and people reinventing themselves. With the low basis in property, it’s easier to access the market.
What is a concern right now for business clients?
I think the entire political climate is a concern right now because we don’t know what happens at the end of 2012 with income tax rates and where everything goes in 2013. They have everything frozen until then. There’s definitely uncertainty. The hard part is there aren’t a lot of black and white answers.
But isn’t the lack of demand what’s really holding up hiring in Las Vegas?
In the past two to three years, companies streamlined their businesses, cut staff and had employees do additional duties. They have more keen awareness of when they hire and what that person’s responsibilities are. Yes, they are waiting cautiously and as there’s more demand, they will be free to hire more people and take more risk.
Where do you think Las Vegas is heading?
I’ll preface my answer by saying everybody calls me an optimist. I grew up here and am a big believer in Las Vegas. The gaming industry has been great to us, and we have great infrastructure and airport. We’ll once again come back, but the growth will be at a slower pace than before. The cost basis is where we were 15 years ago, and people moved here from California and other places because of it. When the Baby Boomers retire, we will have a lot of influx from other states.
Why hasn’t there been more diversification?
We’ve relied heavily on construction, which has taken a big hit. With the transition of construction, you will see greater diversity. As to why it hasn’t happened yet? Is it the Sin City feel, I don’t know? You have to wonder if a portion of the business industry doesn’t want to come here because of that aura of Sin City. You have a lower percentage of employees here being higher executives and you need engineers for high-tech companies.
What can help diversify Las Vegas?
The Nevada Development Authority and all of us in the business community need to push the benefit of low income taxes and a lower cost of living. It is a great place to be and great place to do business. There is no quick fix. It won’t happen overnight.
It has to be a tough time to be in the real estate development business in Las Vegas, especially starting when you did.
It was bad timing for sure. It’s a tough business for everybody. We have been hit hard. The banks have been hit hard and products in the marketplace are going at fire-sale prices.
What has helped you keep going? Your model?
What’s been a benefit for us is the pre-lease model. It’s like the tortoise versus the hare. Instead of building ten buildings and having people come in when they’re done to lease, we went for one building at a time and once you have a substantial amount of leases, you build. When you finish the building, you have a ten-year window to work through it. That has helped maintain positive cash flow, but as far as making or losing money, we have not sold any of the buildings. We’re going to ride this together over the course of the next ten years and hopefully the next few years it gets better.
Where is development going?
There will be some room to build over the next few years, but it will come back slowly. It won’t be at the stage where it was before for a long time.
Will you see more models like yours?
You’re going to see more where people partner up with users of space, and you will see an increase in owner-occupied buildings. If you’re a business, why not take advantage of the excellent costs on a building you are going to be in for the next 10 to 30 years?
What has the downturn taught you as a developer?
I’ve learned if you want a chance to be successful as a developer, do one thing and do it well.