Las Vegas Business Press :: News : Valley land values plunge 74 percent in third quarter

Valley land values plunge 74 percent in third quarter

Number of land deals drops 12 percent in 12 months

BY TONY ILLIA

Financial woes, a souring economy and a mortgage mess have taken a heavy toll on valley land values. Southern Nevada third quarter vacant land prices have plummeted nearly 74 percent since last year, Applied Analysis, a local business advisory firm, reports. Median vacant raw land prices were $524,725 per acre at the end of September, or $1,487,932 less than 12 months earlier. It equals average sale prices of $12.05 per-square-foot, which is a $34.15-per-square-foot drop from a year ago.

"Fundamentals within the residential, commercial and resort markets have slowed, resulting in elevated vacancies, less consumer demand, and more tentativeness," Applied Analysis principal Brian Gordon said. "The new realities of the market have price points resetting and those who purchased property during the past two years trying to make financial sense of their investments.

Valley land values dip yet further when resort deals are removed from the equation, with median prices dropping to $459,798-per-acre for a 32.1-percent year-to-year depreciation. Land prices decline to $10.56 per square foot, or $4.99 less than last year, when premium Strip real estate is excluded. Major third-quarter resort corridor deals include a 4.93-acre site between McCarran International Airport and the Bali Hai Golf Club, fronting the east side of Las Vegas Boulevard. The parcel sold for $30 million, or $6.1 million per acre.

TONY ILLIA | BUSINESS PRESS
Southern Nevada land prices dropped 74 percent in the third quarter.

COURTESY MASSMEDIA
The $5.3 million Clark County Fire Station, Number 33, designed by BJG Architecture + Engineering, recently broke ground on the Las Vegas Convention Center campus.

TONY ILLIA | BUSINESS PRESS
Accountants Inc. Services signed a six-year, $1,029,913 lease for 4,887 square feet of office space inside Marnell Corporate Center in Las Vegas.

Overall, there was a dramatic decline in the amount of land deals in the third quarter, with only 123 parcels totaling 427.1 acres changing hands. It marks a 12 percent year-to-year drop. The decline is due to tightened credit markets and shrinking land availability, both of which are making it harder for developers to attain real estate and find financing. It has significantly curtailed new construction activity and forced some existing developments into bankruptcy.

"Some of these global issues are affecting the market as a whole. Access to capital and cooling consumer demand has businesses reacting much more cautiously," Gordon said. "There are genuine concerns about expansions and relocations when uncertainty looms on the horizon. There is no doubt the market is suffering.

"We are starting to see increased incidents of foreclosures, and many of those highly-leveraged properties are now entering the market again," he added. "Volumes are still down significantly from where there were two or three years ago. But the expectation is that it will eventually recover."

PROJECTS

Ninyo & Moore is performing the design geotechnical evaluation for a new $24.3 million, 60,000-square-foot nursing facility at Nevada State College along Paradise Hills Drive in Henderson. The three-story, steel-and-block building is scheduled to finish in 2011.

The $5.3 million, 14,000-square-foot Clark County Fire Station, Number 33, designed by BJG Architecture + Engineering, recently broke ground on the Las Vegas Convention Center campus near the southeast corner of Desert Inn Road and Swenson Street. CG&B Enterprises is the general contractor for the four-bay station. Clark County is funding construction and leasing it back to the Las Vegas Convention Visitors Authority for $1 per year. The station is scheduled to finish in late summer 2009.

Roel Construction Co. recently completed $824,900 worth of tenant improvements, including two inside Park Flamingo at 2080-2090 E. Flamingo Road in Las Vegas. San Diego-based Equastone acquired Park Flamingo -- a three-story, 113,694-square-foot Class B office park -- in April 2005 for $10.5 million or $92.92 per square foot. Roel upgrades include a 5,000-square-foot expansion for Kimley-Horn and Associates, a national design firm, at Suite 210. Dekker/Perich/Sabatini designed the $279,900 project.

Roel also finished a $272,000, 2,859-square-foot remodeling for Mutual of Omaha inside Park Flamingo, and did an 8,200-square-foot office tenant improvement for Tyco Electronics at 1421 E. Sunset Road in Las Vegas. Westar Architectural Group designed the $273,000 project.

MILLION DOLLAR DEALS

Joe and Geri Dehorty bought 8,012 square feet of retail space at 1040 S. Rainbow Blvd. in Las Vegas for $2.1 million, or $262 per square foot, from Fasio Family LLC & Wallpaper. R&R Commercial's Jack Rappaport represented the seller; NAI Las Vegas' Kent Johns and John Acker represented the buyer.

SVA LLC recently spent $1.82 million to refinance the 45-unit Sunrise Villas Apartments at 521 N. 14th St. in downtown Las Vegas. Access Commercial Mortgage's Devin Lee procured the five-year, fixed-rate loan, which has a 65-percent loan-to-value ratio. It has a 30-year amortization.

The Cracked Egg signed a 10-year, $1.5 million lease for 5,180 square feet of retail space inside Pebble Marketplace Shopping Center at 1000 N. Green Valley Parkway, Suite 480, in Henderson. CB Richard Ellis' Penny Mendlovic and Liberty Realty's Larry Knight represented the tenant; Colliers International's David Grant and Scot Marker represented the lessor, Donahue Schriber Realty Group LP. The reported average rent equals $2.39 per square foot.

The Trust for Public Land bought 2.39 acres of vacant land at 4550 E. Washington Ave. in Las Vegas for $1.4 million, or $584,184 per acre, from 4550 E. Washington LLC. NAI Las Vegas' Ben Millis represented the seller.

Accountants Inc. Services signed a six-year, $1 million lease for 4,887 square feet of office space inside Marnell Corporate Center at 6720 Via Austi Parkway, Suite 370, in Las Vegas. Grubb & Ellis

Las Vegas' David Scherer, Barton Hyde, Michael Hsu and Matthew Kreft represented the tenant; CB Richard Ellis' Bret Davis represented the lessor, MCC Five LLC. The reported average rent equals $2.93 per square foot.

Contact reporter Tony Illia at tonyillia@aol.com or 702-303-5699.

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