Yesterday, the International Times Herald ran a Bloomberg article called Defaults in Las Vegas turn investment banks into decorators. I can only imagine the number of signatures that have to be gathered to actually change a paint color! Here’s an excerpt:

Since January, when Ian Bruce Eichner, a New York developer, defaulted on a $760 million loan, Deutsche Bank has been giving Perini a monthly check for $70 million to continue construction. It is now in full swing with 2,800 workers on site and a dozen cranes towering overhead.

Deutsche Bank, which declined to comment about the Cosmopolitan, is one of a dozen investment banks that rode a five-year boom in commercial real estate by financing developers and landlords while profiting by packaging loans into securities. But credit markets seized up in 2007, sticking banks and brokerage firms with commercial mortgages and bonds. The amount for large U.S. banks alone reached $169 billion, according to Fitch Ratings.

The Cosmopolitan is clearly worth more to Deutsche Bank as a finished product than a construction site. It’s still scheduled to open in late 2009.

But the Cosmopolitan has other problems too: Cosmopolitan Magazine is suing them over their name! Hearst Publications insists “the Cosmopolitan development has tried to confuse the public into thinking the project is associated with the publishing company.” Now I don’t know about you, but I don’t see how I can confuse the two. Here’s what the Cosmopolitan will look like. Now, here’s what Cosmopolitan Magazine looks like.

Next thing you know, they’ll be forcing bars everywhere to pay a royalty every time they serve a Cosmo.

Most people have never heard of Ivanpah. No, not the “ghost town“. The proposed solar power farm? Well, that’s closer.

I am referring to Ivanpah International Airport — currently a hunk of desert near Jean, Nevada — a facility well supported in Nevada and almost unanimously supported by Congress. It is supposed to take some of the passengers that currently fly to McCarran International Airport in Las Vegas, a facility projected to reach its capacity within a few years. Eventually, Ivanpah is supposed to be able to handle 35 million yearly visitors, compared to McCarran’s projected 53 million visitors.

Of course, it doesn’t take much thought to realize that it is going to take some infrastructure to get those visitors from Ivanpah to Las Vegas proper. Proposals include more roads and high-speed rail. Of course, in my mind even better would be high speed rail from Vegas to Los Angeles, perhaps with a stop at Ivanpah. That would sure take a load off McCarran and LAX too, to say nothing of saving fuel as motorists decide to take the train instead of drive.

While most people don’t have a lot to say on the matter, not everyone is happy. Some people worry about the impact it might have on the nearby Mohave Desert, and argue that even if we need an airport it should go elsewhere. Due to military restrictions, such a facility cannot be built north of town, and terrain restricts many other locations. Others argue that between the problems airlines are having and fuel costs, we don’t really need the facility at all, and certainly not in the middle of the desert.

The real strength of Ivanpah is not as a passenger airport. Fares would have to be ludicrously low to get most people to give up flying into McCarran (5 minutes from the Strip) to land in Jean (a half hour away, according to Google). Ivanpah’s real purpose is as a cargo airport. Some experts estimate that bypassing Los Angeles with international cargo could shave days if not a whole week off shipping times.

Of course I would be remiss if I did not mention the jobs that will be created building and subsequently staffing this airport. Jean is close enough that it is commutable from Henderson and the southern half of Las Vegas, although I would expect more development down the I-15 corridor between the two.

No Crown for Vegas: Back in December, Clark County approved the Crown project, which would have been the second tallest structure on the Strip. This week, “Company officials said the recent upheaval in the world financial market caused the plans to be scrapped.” Furthermore, they will stop making payments towards purchasing the land for the project.

The truth about foreclosures: Just because the bank owns it and wants to not own it anymore doesn’t make it a bargain automatically. Buyers still need to do their research, Realtors still need to be aware of market conditions and advise buyers accordingly, and everyone needs to be aware that it takes patience to deal both with the bank and the problems that may arise.

Didn’t I already say this? Tony’s tips for curb appeal on foreclosure sales may be intended for REO agents (who are experienced listing agents or the bank would never call them) and investors who have purchased property from banks (see above). But they still hold true for Joe and Jane Average as they try to sell their home.

Your Friendly Neighborhood Licensee: I bet there’s at least one Realtor that lives in your neighborhood. Heck, there’s at least 3 on my block! Odds are very good that there’s a Realtor or two that takes a vested interest in your neighborhood, even if she lives miles away. She sends newsletters, she knows every house that’s been available for the last year, she goes door to door, maybe she goes to HOA meetings and organizes neighborhood garage sales. Well, she probably does genuinely like the neighborhood — particularly if she chooses to live there! — but the truth is she would like your business too. It’s a win-win situation, because chances are she knows and can highlight the great things about the neighborhood and the homes in it better than any agent in the area.

Lies, Foreclosures, and Gratuitous References to Adult Parties: The Hopps of Florida weren’t the only people making money off the real estate bubble — in fact, I think you could argue that if their actions involved securities, the SEC would be investigating them for “pump and dump“. In fact, many areas had somebody involved in the same sorts of schemes, where homes were bought for no-money-down, taking mortgages for more than the purchase price, and hoping to get out quickly. The Hopps might have been nothing more than a footnote if it weren’t for that one party making the news. The moral? I don’t know, defraud people and corporations as much as you like, as long as everybody keeps their clothes on?

I normally talk general econ over there, but….: Tim Iocono has some things to point out regarding the relationship of real estate holdings to overall net worth of American households.

I won’t bore you with the various conflicting stories I have seen this week regarding the state of the real estate markets. They range from “things will deteriorate for at least another year or three” to “we should see a bottom in the next 6 months” to “we are bottoming now” to “what are you talking about prices have already started to rise again in some places.” But you know how Tip O’Neill said “all politics is local”? Well all real estate is too. And locally, supply is declining. Sometimes when I do “floor duty” (answering real estate inquiries at the office for people who do not have Realtors), the phone rings regularly with people who want to buy. Econ 101 says that when supply declines and demand remains steady — or rises — prices go up.

I hope everyone has a great weekend.

Today, tech news community Slashdot brought us a story from the British news site The Register: a company called Switch Communications — which calls itself “The #1 Rated Disaster Avoidance Colocation and Bandwidth Interconnect Facilities in North America” — is building one of the largest data centers in the world. It’s called the SuperNAP. Here’s more coverage from C|Net, Techbays, and Broadband Reports.

If that was “All Geek to you,” collocation is nothing more complicated than putting your computer servers on somebody else’s property. Not only does it ensure that somebody with real tech savvy is there should anything go wrong, but it’s great insurance against natural disasters. Las Vegas doesn’t have a lot of hurricanes (this site is from a guy who rode out Katrina in a collocation center), tornadoes, tsunamis, or things like that. Our flash flooding problem — this fire truck was just minutes from my home and office — has been sharply reduced if not eliminated in all but the most serious of storms by a series of drainage canals under the city (these canals were a critical plot point in at least one episode of CSI). Although Nevada does have some earthquake activity, we have a lot less than California, and most of it is nowhere near Vegas. Knock on wood. NAP is an acronym for Network Access Point; a SuperNAP would be a really, really big Network Access Point!

How big would it be? How about 407,000 square feet with 30 cooling towers and over 7000 server cabinets! Here’s more:

The SuperNAP will cost about $350m, and be about the same size as Google and Microsoft’s $500m data centers. Roy, however, thinks Switch can pack about four times as much computing power in the SuperNAP as these rival centers thanks to the cooling systems and energy supplies.

The irony of putting all this cooling power into a desert area where summer temperatures routinely hit triple digits for weeks on end! Perhaps they will use solar power?

Granted, $350 million is a lot less than the $2.7 billion ($2700 million) it cost to build the Wynn Hotel/Casino, but it will doubtless have a positive impact on our local economy, and put a lot of very smart techie-types to work.

Remember some months back that the Tropicana begged workers to put off actually depositing their paychecks? Having lived through The Great DotCom Boom and subsequent bust, I know that this is a great big, glowing “get out now” red flag for any company’s prospects.

The inevitable has happened:  Tropicana Entertainment LLC is declaring Chapter 11 bankruptcy.  This does not mean they will be closing down — Reuters makes sure to tell us that the casino remains open! They will be renegotiating $2.8 billion in debt, and the Atlantic City casino will be sold by the State of New Jersey. For the ultra-short version, try this “just the facts, ma’am” rundown.  For more links, try our friends over at Vegas Happens Here, and don’t forget his great commentary on the bankruptcy filing itself.

This is part of a huge jump in the number of American corporations filing for bankruptcy.

Good news for Vegas real estate development: the Cosmopolitan Resort and Casino will avoid foreclosure. When finished, the hotel and convention facilities will be run by Hyatt. The complex will include roughly 3000 hotel rooms in addition to a number of luxury, high-rise condominiums.

A couple items on that quintessential Vegas export, weddings! First we have the Vegas Wedding FAQ. Not up for a Vegas wedding? Join some other couples in a much more sedate (but equally quick) Henderson wedding.

Confused about the various mortgage options and qualifications out there? Thanks to Inman News for pointing out Mortgage Grader. Warning: inline sound and video.

And a foreclosure prevention currently under debate would allow bankruptcy judges to modify or “cram down” new terms on some mortgages of owner-occupied homes with “subprime or non-traditional” mortgages. A bunch of stipulations apply, of course, and terms are still under negotiation in Congress. Needless to say, lenders hate this idea, and say it will increase lending costs to consumers. Notable economic minds like Larry Summers advocate some sort of bankruptcy reform needs to be a part of the foreclosure solution.

Looking forward to seeing some of you this Friday, February 29, 2008, at the Desert Shores Dojo!

I am proud to announce that I will be on hand at the United Studios of Self-Defense Desert Shores Dojo for a networking open house on Friday, February 29 from 6-8 PM. The dojo is at 8410 W. Cheyenne, Suite #104, near the intersection of Rampart/Durango and Cheyenne in the Albertsons parking lot.

I will be on hand to answer your questions about the Las Vegas real estate market, real estate in general, local neighborhoods, and of course I will be glad to discuss helping you buy or sell a home. If you have specific issues you want to discuss with me, don’t wait: call me at 702-727-7842 today! If you would like to search listings first, click here!

Other businesses will be on hand to discuss their products and services as well. For more information, a list of businesses that will be there, or to reserve room for your business, be sure to call 702-396-9944 and talk to Miss Teri or Sensei Bryan today!

The real estate market is like a giant boat:  it has a lot of momentum, it takes a while to get where it’s going, and it takes a lot to get it turned.  In the case of Las Vegas, tugboats are already on the scene, nudging us towards safe harbor.

The Review Journal picked up this article by Jim Woodard called Buyers can find benefits by making home purchase in current market. His main points are that record inventory means incredible selection, there are no bidding wars (well, personal experience suggests “few”), and interest rates on a 30 year fixed mortgage of under 6%. Sure, these things are true other places as well.

The other item is from Inman News, a great source of news and insight into the real estate market nationwide.  They actually took the time to tell us Second-home buyers flocking to Las Vegas.  They specifically talk about the City Center project, with “18.6 million-square-foot, $7.4 billion hotel, casino, retail and residential complex on 76 prime acres”, hiring “7,000 tradesmen and 350 supervisory personnel”, where “60 percent of all residences, starting at $500,000, have sold in the past 10 months.” Many of these units are being purchased as secondary residences, according to the article.  This says nothing of the jobs that will be created when their “60-story, 4,000-room hotel and casino” opens.  Of course, this is only 10% of the hotel rooms currently scheduled to come online in the Valley over the next few years.

One last local note:   Maybe you don’t have a half million dollars for a high-rise condo vacation home on the strip; but if one looks very carefully at the chart of the Case-Shiller Home Price Index, it looks very suspiciously like homes in Vegas can be purchased for near 2004 prices.  Follow the emerald green line. Or money green if you prefer to think of it that way.

Particularly if you are investing with non-US Dollar denominated currencies, you should take advantage of the current market.  Your Canadian Dollars, Yen, Euros, Pounds, Francs, or what-have-you go further now than they have in a very long time.

Slashfood reports that plans are on the table for a huge, 30 story tall vertical farm right here in Las Vegas.  More:

This $200 million project would be able to feed 72,000 people for a year and would grow everything from apples to winter squash. Of course, all of the products would be distributed directly to the casinos and hotels, who will be funding the project in the first place. The farm could potentially make up to $25 million a year, plus $15 million in potential tourist revenue. That means that it would eventually recoup the enormous start-up costs, especially with it’s projected $6 million per year operating costs.

Remember, the Valley’s population recently passed over the 2 million people mark.  Any project that spends $100 million per person who lives in the region — and recoups its investment in about 10 years when accounting for projected operating expenses — is going to put some people to work.  Furthermore, if this goes according to plan, it is almost inevitable that someone will want to build another, even bigger one.  That’s just how we do things in Vegas.

Beat the rush:  make your real estate investment in Vegas now.

If you’ve ever been to Hoover Dam, you understand that in addition to being a huge water management project, above and beyond creating a massive lake, even more than creating gigawatts of electricity, Hoover Dam is part of a functional federal highway.  Well, sort of.  Highway U.S. 93 is a two-lane road on the Dam as it runs from Arizona to Montana.  Even if the Dam itself were not a massive tourist destination, 2 lanes would hardly be sufficient.  Add to that the potential of the Dam as a terrorist target — truck traffic hasn’t been allowed since 2001 — and it was almost inevitable that someday they would have to build a bridge to add capacity and bypass the Hoover Dam itself.

The bridge is supposed to be finished in 2010, and the crane system needed to make it all happen should be working by the end of the month.

The new pulley-type, “high-line” crane system was designed and specifically built with the bypass project in mind, said Dave Zanetell, a Federal Highway Administration engineer overseeing the project. “The other system was basically brought in from another construction site.”

More than a year ago, two pairs of 280-foot towers that made up the other system collapsed amid 55 mph winds.

The high-line system is needed to carry up to 50 tons of materials and workers about 1,100 feet over the Colorado River via 2,300-foot-long steel cables that stretch between the towers and over the gorge.

Here’s more information about the bridge itself:

The 1,905-foot bridge will include an 890-foot span over the river. It will provide four lanes for the U.S. Highway 93 traffic that currently uses the two-lane road over the dam.

About 17,000 cars and trucks are expected to use the new bridge on a daily basis.

Today more than 2,000 trucks detour the dam via U.S. Highway 95 to a river crossing in Laughlin. Truck traffic was banned from the dam just after the terrorist attacks of Sept. 11, 2001.

The new structure will be named the Mike O’Callaghan-Pat Tillman Memorial Bridge. O’Callaghan was a popular two-term governor of Nevada, and Tillman was a patriotic Arizona Cardinals football star who joined the military after the 2001 attacks and was killed accidentally by his fellow U.S. soldiers in Afghanistan.

Pretty cool stuff.