OFF-STRIP LAND VALUES FALL 25 PERCENT IN FIRST QUARTER

Roughly 74 acres along the resort corridor
changed hands during period

May 15, 2008 - A souring economy and a housing market downturn helped lower vacant valley land values in the first quarter of 2008, reports Applied Analysis, a local financial consultancy. Median vacant land values were $598,700 per acre at the end of March, marking a 24.6 percent drop from a year ago. The average price per square foot was $13.74 or $4.48 per square foot lower than in 2007.

But Southern Nevada land values skyrocket when Strip deals are included -- average prices jump to more than $1.55 million per acre for a 95.5 percent year-to-year appreciation. Land prices swell to $35.62 per square foot, or $17.40 more than in 2007, when premium resort real estate is included.

Roughly 74 acres along the resort corridor changed hands in the first quarter, including a $100 million deal for 8.43 acres along Convention Center Drive, just east of the Strip. The 3.24-acre former Sandhurst Tower condominium project site also sold in the first quarter, along with 63 acres of resort-entitled land along the south Strip.

A residential downturn and slow economy caused a 71.6 percent dip in the amount of land changing hands in the first quarter. The Bureau of Land Management, Southern Nevada’s largest landlord, won’t hold another big federal land auction until November.

Roel Construction completed a 2,448-square-foot tenant improvement of the Arroweed Lounge inside Avi Resort & Casino in Laughlin.

Rexallen1 Series LLC and Timothy and Teresa Potter recently bought industrial buildings inside the Post Business Park for $193 per square foot.

"Given the lag time between contracts and closings, the first quarter vacant land valuations reflect the impacts of the economic slowdown that was prevalent throughout most of 2007," Applied Analysis principal Brian Gordon said. "The number of properties being sold has reached a new low, which has the potential to place further downward pressure on pricing."

Only 90 parcels totaling 252 acres changed hands in the first quarter. It marks a 71.6 percent year-to-year decline in activity, due, in part, to shrinking available land supplies. The real estate crunch isn't expected to ease anytime soon. The Bureau of Land Management, Southern Nevada's largest landlord, won't hold another major federal land auction until November, with plans to offer only 150 acres in small parcels between 2.5 acres to 20 acres.

"Those with development plans are now questioning the feasibility of their projects as vacancy rates are increasing and rent growth is essentially flat," said Applied Analysis principal Jeremy Aguero. "On the residential side, reduced sale prices and carrying costs on underperforming communities are shrinking profits. Although one quarter does not make a trend, these reductions are in line with our expectations."

PROJECTS

Myles Catania and Ron Bures Development are building the $13 million, 38,950-square-foot Catania Center at 6045 S. Durango Drive in Las Vegas. Gatski Commercial's Brad Benz and Nick Barber are the project representatives. Situated on three acres, the four-building office and retail complex will finish in the first quarter.

Las Vegas Paving Corp. is performing $8.3 million in storm drainage and sewer line upgrades along Elkhorn Road between Torrey Pines Drive and Rainbow Boulevard, and along Torrey Pines between Elkhorn and Dorrell Lane. The project will finish in the fourth quarter.

Southern Nevada Paving is doing $1.8 million in Fort Apache Road improvements between Sahara Avenue and Desert Inn Road, including new medians, paving, and landscaping, and enhanced traffic signals at the Sahara and Fort Apache Road intersection.

Roel Construction completed a 2,448-square-foot tenant improvement of the Arroweed Lounge inside Avi Resort & Casino at 10000 Aha Macav Parkway in Laughlin. YWS Architects was the project architect.

MILLION-DOLLAR DEALS

Rexallen1 Series LLC bought a 15,936-square-foot industrial building inside Post Business Park at 4705 and 4717 W. Post Road for $3 million, or $193 per square foot, from Post Industrial Park Inc. Colliers International's Brian Riffel represented the seller.

3 Tomatoes & A Mozzarella signed a 10-year, $2.8 million lease for 5,500 square feet of retail space inside Revere Marketplace at 945 W. Craig Road in North Las Vegas. The Force Realty's David Grosh represented the tenant, and Grubb & Ellis' Nelson Tressler represented the lessor, Keith-Nevada Sunset II LLC and Craig Road Group LLC. The average reported rent equals $4.24 per square foot.

A residential downturn and slow economy caused a 71.6 percent dip in the amount of land changing hands in the first quarter. The Bureau of Land Management, Southern Nevada’s largest landlord, won’t hold another big federal land auction until November.