Las Vegas Business Press :: News : Luxury condo market softens in fourth quarter

Luxury condo market softens in fourth quarter

Number of canceled or suspended units passes the 12,000 mark

BY TONY ILLIA

The luxury condominium market softened in the fourth quarter, with more units than demand, according to Applied Analysis, a Las Vegas-based business advisory firm. A total of 98,432 units were built, planned or underway in the fourth quarter, yet only 3,889 units (4 percent) had been actually completed. Roughly 11.3 percent, or 11,124 units, were under construction.

The Strip corridor saw the majority of building activity, with 4,795 units going up, including: 1,282-unit Trump Tower; 405-unit Sky Las Vegas, 428-unit Allure Las Vegas; 2,706-unit Project CityCenter; and 636-unit Turnberry Towers, among others. Another 2,332 units were under construction off-Strip and 784 units were underway in downtown.

"We estimate that another 18,500 units will complete construction by the end of 2010," said Brian Gordon, principal of Applied Analysis. "While the depth of the market over the long run appears fairly strong, the likelihood that the feverish sales volume reported in 2004 and early 2005 (will be maintained) is limited."

Courtesy Turnberry Associates
The dual 45-story Turnberry Towers at Karen Avenue and Paradise Road were among the 11,124 luxury condominium units under construction in the fourth quarter.

Courtesy The Firm PR
UPA Group is the contractor for the Sullivan Square mixed-use community at Sunset and Durango (above and below). The project is scheduled to break ground in May.

Courtesy The Firm PR

The lion's share of condo projects remain in the planning and/or pre-selling stages, accounting for 70,796 units -- 72 percent of the entire market in the fourth quarter. Meanwhile, 10,944 units had been canceled and another 1,679 were suspended.

The R.I.P list includes: the 398-unit Sandhurst Tower; the 376-unit Curve; the 888-unit Vegas 888; the 2,400-unit Urban Village; and the 11-tower, 4,400-unit Las Ramblas, among others.

"Few projects are likely to commence construction in the next 12 months," Gordon said. "Sources of market demand in 2007 will be much different than reported two years ago."

PROJECTS

The Korte Co. completed a $1.4 million, 6,626-square-foot medical office building for Megan Victoria LLC at 1725 Village Center Circle. Architect Marc Lemoine designed the single-story, stone-and-stucco structure.

UPA Group has been named general contractor for a $800 million, 2 million-square-foot Sullivan Square mixed-use community, at Sunset Road and Durango Drive. The 16.5-acre project by Glen, Smith & Glen Development will consist of eight buildings from 12 to 20 stories tall.

The first phase entails a 20-story, 159-unit high-rise building called Madison I. It will be followed three identical, 200-foot-tall towers for a combined 636 vertical residences. Sullivan Square additionally will have 25 shops, totaling 55,000 square feet, plus a 1.5-acre park. Groundbreaking will take place in May with the first units coming online in January 2009. The project is expected to reach build-out by 2014.

Crisci Builders is performing a 21,462-square-foot office-tenant improvement for Boyd Gaming at 3883 Howard Hughes Parkway, Suite 900. Designed by JMA, the $1.78 million project is scheduled to finish in April.

Temple Residential Communities is building a 168-unit mid-rise community called Uptown at Centennial Parkway and Statz Street in North Las Vegas. Designed by Steinberg Design Collaborative, the nine-acre project will consist of six three-story buildings, containing homes from 1,178 to 1,436 square feet in size. Prices start in the low $200,000s. Uptown is expected to reach build-out later this year.

MILLION-DOLLAR DEALS

JMK LP bought a 45,998-square-foot industrial building at 955 Grier Drive for $6.5 million, or $141 per square foot. CB Richard Ellis' Geoffrey West and Jeremy Green represented the buyer.

The Nevada Gaming Control Board signed a seven-year, $2.58 million lease for 14,285 square feet of office space at 750 Pilot Rd. CB Richard Ellis' Brad Peterson and Karolina Janik represented the tenant. The reported average rent equals $2.15 per square foot.

Nevada Restaurant Services signed a 10-year, $1.9 million lease for 4,063 square feet of retail space at the northwest corner of Bruner Avenue and St. Rose Parkway. CB Richard Ellis' Christina Strickland represented the lessor, Mike Sab LLC. The reported average rent equals $3.89 per square foot.

Southwest Stone & Tile bought a 16,180-square-foot industrial building at 2965 Lincoln Rd. for $1.6 million, or $98.88 per square foot, from Jackson Shaw Co. CB Richard Ellis' Donna Alderson represented the seller and CB Richard Ellis' Karolina Janik represented the buyer.

Luxury Optical Holdings signed a five-year, $1.59 million lease for 24,510 square feet of office space at 2651 Crimson Canyon Dr. CB Richard Ellis' Brad Peterson represented the tenant. The reported average rent equals $1.08 per square foot.

Augie Bustos bought a 5,500-square-foot industrial building at 2435 Losee Rd. in North Las Vegas for $1.36 million, or $247 per square foot, from Southern Foods Group. CB Richard Ellis' Donna Alderson represented the seller.

Tru Logistics signed a three-year, $1 million lease for 63,000 square feet of industrial space at 4780 N. Lamb Blvd. CB Richard Ellis' Greg Tassi represented the tenant. The average rent equals 44 cents per square foot.

Step Development LLC bought 35,423 square feet of land at the at the northwest corner of Jones Boulevard and Russell Road for $1.3 million, or $36 per square foot, from Vince, Hikmat and Layla Salmu. Coldwell Banker Commercial ETN's James Lopes represented the seller.

tonyillia@aol.com | 702-303-5699

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