News from Nevada By Design

Yes, I said it! I can see the jaws dropping all over town and those who know me; aghast at the fact that Craig Ruark almost used profanity. And, now that it is out of my system, I can concentrate on moving forward.

So here is the question; do we sit back and invest in the doom and gloom of the economists, newspapers and talk show hosts, or change the channel. It is a conundrum! How do I as a marking guy stay on top of current economic news but remain up-beat in the face of clients? The solution is Jazz. At least it is for me; I have decided to change the channel to a more upbeat Jazz beat.

It is time to reach out and grab opportunity before it gets away! And I ask you; are you ready with your product?

Amidst headlines such as "Las Vegas economy in free fall" or "Home prices drop to less than half '06 peak", I am POSITIVE that change is in the air.

It could be based on the hope of the President's stimulus package, or the fact that businesses are realizing that money must work in order to be of any benefit to the holder, or maybe it is just Spring Fever. Regardless of the cause I am not alone; there is a movement to ignore the economic naysayers and look optimistically toward the future. Like the spring flowers, lenders have regularly begun to pop up in my e-mail inbox and Linkedin® notifications to broadcast the fact that they have investors looking for various types of projects in which to place their money. I see the tide moving in and the ocean swells are increasing.

In fact, last week I received an e-mail that peaked my interest. It was from a group out of New York whose flyer boasted of $300 m quota for the second quarter 2009 (to be spent in $20 m increments), for projects such as:

Medical/ Healthcare
Professional Owner Occupied
Industrial
Security Defense
Multi-family
Education/Universities/Colleges
Green or LEED certified properties
Senior Living

So I e-mailed the company's CEO, from the link at the bottom of the announcement, to find out more information on these funds. He responded that the funds are available to Credit Unions for reinvestment to their clients and would be happy to invest in the Las Vegas market. If you are interested in this e-mail offer let me know and I will forward it to you.

Despite what you might think about the Wall Street crowd, lenders are pretty astute when it comes to analyzing a viable project. They not only want to look at the long-term viability of the project, but the upfront costs as well. And it is the upfront costs that often times trip a project up. Many developers underestimate (or don't want to recognize), the cost of moving dirt or installing infrastructure. Or perhaps they are not getting an accurate presentation of costs from their consultant.

When you find a "well" that is not dried up, it is our recommendation to carry as much water back home as you can on the first trip. Because once word gets out that there is water available, the line will start forming in a hurry and there might not be enough for a second bucket. That is why at NBD we thoroughly research the entitlement requirements and all other factors (from a civil engineering point of view), that will be needed to complete your project and base our proposal on those needs so you will not have to return to the "well".

Over the last five years, data suggests that the median entitlement period was 21 months as of 2005, a 15% increase from 2000 (PPR 2008). Of that entitlement period, the portion of time for civil engineering approvals has ranged between 7 to 9 months depending on the jurisdiction, size of property, complexity of the project, etc. That means if you have not started the planning and design process today you will not be constructing until 2011.

What are you waiting for? Las Vegas cannot afford another year of stagnation. Please let me know if you hear the music and together, let's start a chorus.