"The truth is, the way Wall Street sees the commercial sector, they're throwing the circuit-breaker and that probably stopped any overbuilding, which is a good thing," Schwartz said. "It's going to make loans harder to come by."

Ultimately, what happened on Wall Street is a lack of confidence, he said, and until that confidence is restored, there probably won't be much change in the short term for underwriting standards.

Kevork Zoryan, executive director of Morgan Stanley in Los Angeles, said he's talking to people in the capital markets daily and there seems to be an abundance of capital waiting in the wings for those distressed properties, especially from offshore investors interested in U.S. real estate.

Meanwhile, office market fundamentals remain consistent for underwriting standards and developers did not really got off track in most locations, he said.

Commercial markets continue to perform well in Las Vegas with 3 percent vacancy in retail and 4.5 percent vacancy in industrial, John Restrepo of Restrepo Consulting Group said. Only the office sector is showing some weakness at 12.4 percent vacancy.

When Wall Street analysts look at investment markets, Las Vegas could be unfairly penalized by softness in other office and retail markets around the nation, Restrepo said.

Chuck DiRocco, managing director of ULI Industry Trends and Analysis, said apartments, industrial and well-leased office will avoid trouble in a slowdown.

Investment prospects for major property types in 2008 were highest for industrial and distribution, which ranked at 6.03 on a scale of 1 for "abysmal" to 9 for "excellent." It's followed by apartment (5.94), office (5.78), hotels (5.78) and retail (5.42). Residential was less than "fair" at 4.29.

Las Vegas falls somewhere in the middle of U.S. city risk in the 2008 Emerging Trends in Real Estate publication from Washington, D.C.-based ULI and PriceWaterhouseCoopers. Washington, Los Angeles and New York were the three lowest-risk cities, while Detroit, New Orleans and Cleveland showed the most risk.

"Cities dependent on the Colorado River begin to worry about how population growth will affect future water supplies," the report said. "All those people moving from high-cost California markets may go thirsty one day in Nevada, Arizona, Utah and Colorado without new water sources or stepped-up conservation. Forget about green lawns in these places."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.