By Hubble Smith
LAS VEGAS REVIEW-JOURNAL
Posted: Jul. 24, 2011 | 2:00 a.m.
Cathy Jones admits she doesn't have a great head for numbers. That's why she uses a calculator.
Nonetheless, she's a shrewd number cruncher.
Jones, a certified public accountant with a bachelor's degree from Ohio State University, founded Sun Commercial Real Estate in 2006, just before the start of the recession. She has survived the steepest real estate market downturn in Las Vegas history. She doubled her staff from five to 10, including three new hires in July.
"I think we've become market experts in office, retail, industrial and land," Jones said at Sun Commercial's office in the Park at Spanish Ridge, near the Las Vegas Beltway and Russell Road. "We're asked to provide a broker's price opinion all the time for banks and special servicers.
"I think what we do that's a step above the competition is a full-blown, discounted cash-flow analysis for our clients," she said. "It's very comprehensive."
Jones provided a broker's opinion of value on several commercial properties in Las Vegas for LNR Partners, the company that held the $1 billion commercial real estate auction here in May.
Sun Commercial has negotiated more than $650 million in commercial real estate sales and lease transactions, including about $30 million this year, Jones said. About 80 percent of current transactions involve distressed properties, either bank-owned or in default.
The company's scope of services includes buyer and seller representation; investment sales; acquisitions and dispositions; property management; asset valuation; and market research.
When she's not brokering deals, Jones enjoys horseback riding and equestrian jumping with her Dutch warmblood, Maple.
"She's a bad-ass girl," Jones said.
Question: What brought you to Las Vegas?
Answer: I took an auditor job with Deloitte, Haskins and Sells at that time. I interviewed in both Phoenix and Las Vegas.
Question: And you were living in Phoenix. Was it hard to leave?
Answer: When I moved to Phoenix, it was a very welcoming town. When I moved here, people I worked with were friendly, but they were very private. Come the weekend, you didn't have people opening up their homes and inviting you over. It's a challenging city for a young, single woman to move here.
Question: What kept you here for 30 years?
Answer: I enjoyed the people I met and I enjoyed the fact that Las Vegas provides a unique opportunity for businesspeople to make a difference through volunteer work and being actively involved with organizations. I've been involved with the United Way as treasurer and chairman. Even though the city is large, the business community is small. In a larger community, it's harder to get involved. From a career and business standpoint, you're in a position to reach out and meet people at all levels in the business community. It's harder to meet with the president of banks and large firms in big cities.
Question: What's the most fascinating part of your job?
Answer: I'm a transaction junkie. I love working on transactions. Every transaction is different and unique. And I enjoy the clients. One of the things that sets our company apart is our focus on long-term relationships, not just the deal, and that's very important to us. Seventy percent of our business is repeat, which is really high. People understand we're there for the long term. Sometimes we recommend not doing a deal because of the timing not being right.
Question: What trends do you see in commercial real estate? Will we ever recover?
Answer: I do feel we're bouncing along the bottom as everyone says. There's a lot of money looking at Las Vegas for long-term potential just because the price point to acquire property is at such a low. Most of the buyers are what we call value-add clients. They buy properties with higher vacancy and they spend the next one to three years stabilizing them and look to sell down the road or hold for a while.
Question: What advice would you give someone starting out in commercial real estate?
Answer: The most important thing is to pick the right (brokerage) team to work with so you get deep experience. Don't be in a hurry to get out and form your own team. Get some experience under your belt working with a team to provide you with a good foundation.
Question: What do they need to learn?
Answer: The skill sets you have to have are very good people skills. You have to be a good listener. You have to have an aptitude for numbers. In commercial, you have to be able to analyze the numbers and be comfortable with contracts. You have to be able to read and understand contracts.
Question: Who taught you about the business?
Answer: Terry Wright at Nevada Title Co. My experience at Nevada Title was very significant in my success. I had financial experience, but the contracts, the people skills ... Terry Wright really mentored me on people skills on client calls.
Question: Will we continue to struggle with commercial mortgage defaults in Las Vegas?
Answer: There's still a large issue with CMBS (commercial mortgage-backed securities). We've only touched the tip of the iceberg, I'm afraid. A lot of those loans will come due in the next two or three years and the value is not there to refinance. That's going to be a continuing problem, not because borrowers are delinquent, but because the loans come due.
Question: What about workouts with the banks? Are they willing to extend or alter the terms of the loan to avoid foreclosure?
Answer: I haven't seen a lot of workouts. I do feel like lenders are working harder to work out a short sale with the owner where the lender shares in the loss of value. I know CMBS lenders will work on them for a year before they decide to foreclose. Borrowers were able to bid on their own properties at the (LNR) auction. Who's going to pay more for the property than the borrower?
Question: How tough is it to get financing these days?
Answer: Banks are starting to do some financing again. Their underwriting requirements are so stringent, so it makes it more challenging and they're definitely giving no special deals. It's 75 percent loan to value, whereas it used to be 85 percent, and they're going with market interest rates.
Question: Who's lending?
Answer: Life insurance companies, pension funds and believe it or not, some of the CMBS is in play again. There's a lot of private money and institutional money.
Question: If you weren't in commercial real estate or finance, what else might you have liked to do for a living?
Answer: Money's not an object? I'd like to train horses for jumping and show.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491
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