Yet more signs that Las Vegas is doomed to soul-crushing misery and despair

You know how people are saying that it ("it" in this case being the economy, society, civilization, whatever might be left of the ever-dimming promise of the future, etc...) is going to get worse before it gets better? This NYT story sort of brings some of that down to the ground:

Vacancy rates in office buildings exceed 10 percent in virtually every major city in the country and are rising rapidly, a sign of economic distress that could lead to yet another wave of problems for troubled lenders.

With job cuts rampant and businesses retrenching, more empty space is expected from New York to Chicago to Los Angeles in the coming year. Rental income would then decline and property values would slide further. The Urban Land Institute predicts 2009 will be the worst year for the commercial real estate market “since the wrenching 1991-1992 industry depression.”

Banks and other financial companies have not had the problems with commercial properties in this recession that they have had with residential properties. But many building owners, while struggling with more vacancies and less rental income, will need to refinance commercial mortgages this year.

The persistent chill in lending from banks to the credit markets will make that difficult — even for borrowers who are current on their payments — setting the stage for loan defaults.

The Times story indicates that not just office space but gluts of retail and other sectors of commercial development will also help set off another financial "time bomb" in the nation's banks. And...

Regional banks may be an even bigger concern. In the last decade, they barreled their way into commercial real estate lending after being elbowed out of the credit card and consumer mortgage business by national players. The proportion of their lending that is in commercial real estate has nearly doubled in the last six years, according to government data.

The story doesn't mention Las Vegas specifically, but by one estimate, office vacancy rates 'round here were 17.5 percent in the third quarter. Hmm, take a drive by the brand spanking new but completely empty structures -- nary even a nails salon or tanning booth to be found! -- that have been erected in countless strip malls and commercial parks scattered hither and yon throughout the greater Las Vegas metropolitan statistical area, and that number seems awfully low.

Anyway, it's good to know that Southern Nevada's ample inventory of empty and deterioriating commercial buildings isn't a complete waste of space and materials that serves no purpose whatsoever. At least those buildings are a leading economic indicator.

Comments

[temujin... khan of the yakka mongols]

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...Aye Laddie....A Moon or two ago I noticed a row of vacancies at Sahara and Decatur Shopping Center where Office Max is located..

...Gone was Big Five Sports, Michael's, G.N.C., all in a row, a month before the Christmas Season.

...73,000 shopping vacancies are forecast nationwide for January by a shopping center agency recently.

...Did you notice the "50-75 percent off" signs for the Christmas Shopping season.

...Aye Laddie the stimulus package may not arrive in time for many a shopkeeper. Ti's time for a strong dram of Scots whiskey lad.

[Patrick]

The Times already did a story on the Vegas commercial real estate market and it looks bleak, going to get worse in 2009 and is the second worst market in the country.

Hence, Brian Greenspun pushing for tons of bailouts for people like him.

[Scorpiogal]

{{{{{{crickets}}}}}}}

....breaks out the Drambuie to make a Boilermaker for Temujin...

[....Temujin... Khan..of..the..Yakka..Mongols...]

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...Have some Madeira...my Dear a

it's so much better than beer a

...Have some Madeira... my Dear a

I happen to have a cask very near a