WINTER 2015
Las Vegas Valley
HIGH-RISES 215
I-15
95
Juhl
The Ogden Newport Lofts
One Queensridge Place
Allure Sky Las Vegas
Soho Lofts Turnberry Towers
Trump
Metropolis
Park Towers
The Martin Palms Place
Platinum Panorama I & II
215
Regency Tower
Signature (Turnberry MGM)
CityCenter -Mandarin Oriental -Veer Towers -Vdara
One Las Vegas Boca Raton
I-15
515/95
CONDOMINIUM CONDO-HOTEL
Coldwell Banker Premier has facilitated a multitude of high-rise transactions in Las Vegas. We draw on this experience and information obtained from local government and the Greater Las Vegas multiple listing service. The information is deemed reliable but is not guaranteed.
Las Vegas Valley
HIGH-RISE TIMELINE
Approximate Dates Closings Began
lasvegashomes.com
Update on the
LAS VEGAS HIGH-RISE
Condominium Market
While we see each high-rise project as a market unto itself, for brevity, we occasionally refer to the “market� for high-rises. The high-rise market is a very nuanced story to tell due to the very specific nature of each project and because of the shifting ownerships over the past couple of years. The most recent wave of development saw the delivery of many new buildings at exactly the worst time, amidst a national recession. This was followed by a market characterized by free-falling prices, loan defaults increasing and whole builder portfolios becoming distressed. Today, the market is much stronger, however it is not always reflected in sales trends because supply is much more patient, with far less distressed owners.
Year-Over-Year Comparison - MLS
Sales velocities are at a much more metered pace, a parallel to what we are observing in the single family home market as well. This pertains more to a market-wide sense because some developer held projects continue to achieve respectable sales velocities, while others are more concerned with price maximization. In the resale market, a wide mix of ownership implies a broad set of reasons to sell and now that financial distress largely removed, the market is moved more by traditional reasons such as job transfers, settling of estates or lifestyle changes. High-rise prices are ticking up gradually, corresponding with a generally improving labor market and additionally some major Las Vegas Strip projects on the horizon or under construction are buoying confidence in the sector. The re-emergence of some financing products should also help demand for high-rise homes. Single family homes have already seen a solid run-up in values over the
Note that much of the builder inventory is not posted on the multiple listing service so this serves as a sample and not the full universe of properties. Further, average sale
past couple of years and high-rise homes have largely lagged that cycle but do
prices must be viewed with caution due to the vast difference in the size of homes sold
appear to be gathering some more organic interest by owner occupants, some
lasvegashomes.com
between the two periods.
Relative Sale Prices - Q3 2015
of which are making these homes their primary residence. As the single family market has become more fully priced, opportunities to buy high-rise residences with likely upside appear to be present in today’s market. Additionally, you could not build most of these buildings for what units trade for today, a possible signal of a longer-run upside. What remains relevant is the relative value play between Las Vegas and major markets like coastal California, which reflects a major disparity in prices for comparable product, with the exception of valuing an ocean view and having access to large job markets. While Las Vegas does not have an ocean view, a sea of lights at night and daytime territorial views continue to resonate with buyers. Additionally, tax considerations remain a primary, non-lifestyle reason to own a residence in Nevada.
Actively Marketed Projects 2015 has seen a few major shifts in either ownership of bulk unit holdings or in marketing activities surrounding current sponsor sales. Recently, Pathfinder Partners purchased the remaining 64 homes at Sky Las Vegas from the original sponsor so this project may be added to the actively marketed list at some point. Conversely, The Residences at Mandarin Oriental within the CityCenter campus can essentially be considered to have a completed sales cycle and will be coming off of the
actively marketed list. Although delivered during a challenging economic period, the project has preserved value better than many of the other Las Vegas projects of the same era and prices have been on an uptrend for the past several years. Similarly, One Queensridge Place, which consists of two towers located in the Summerlin area of west Las Vegas is also a completed sale project. Taken together, both The Residences at Mandarin Oriental and One Queensridge Place signal that Las Vegas has become a true luxury living destination with vertical living options. Another CityCenter project, Veer Towers, originally sponsored by CityCenter Residential and later sold in bulk to Ladder Capital in 2012, remains an actively marketed project by Pordes Residential. Veer’s highest post recession sale occurred in September which was a larger west building home on the twentyfirst floor. The sale was $2 million or $886 per-square foot, a high water mark figure for 2015 so far. Turnberry Towers, an adjacent strip option, also continues it sales program and recent offerings have started from the high $200,000’s for one bedroom and $530,000 for two bedrooms and $827,000 for three bedrooms. In the third quarter, closings have averaged about four per-month. The newcomer to the actively marketed list is One Las Vegas on the South Strip. Homes are being marketed from the low $200,000’s for one bedroom homes, the high $200,000’s for two bedrooms and the low $400,000’s for three bedrooms. Recent closings have been between approximately $230 and $250 per-square foot. Downtown, The Ogden remains the only actively marketed for-sale project, closing about four per-month on average in the recent quarter and ranging from about $260 to $323 per-square foot. Projects like these are not always a perfect guide as to what sales rates may be since there has been a longstanding rental component that have to be cycled through before certain units become available. This may be a similar consideration at Sky Las Vegas or One Las Vegas. For condo-hotels, Palms Place and Trump continue to reduce their inventories. Trump had some good sales velocities over the summer, selling a handful in July but selling fourteen homes during August and September, some of which appear to be investment buyers picking up multiple units. Similarly, Palms Place continued to have some traction. Occupancies in the hotel sector have been quite good, so the lodging component of these investments has pushed some owners into positive cash flow.
Source: mlxchange.
lasvegashomes.com
High-Rise Closings and Sale Prices Per-Square Foot - Q3 2015
Source: Clark County, Coldwell Banker Premier Realty.
One important aspect of current marketing to note are the high commission rates being offered to brokers, nearly all of which are above 4% with many at 5% with occasional additional bonuses. Over the summer, several projects ran additional promotions where buyers would have one or two years of HOA paid, resulting in a material difference between the offered price and the net price the seller receives. Some of these specials persist into the fall and winter. Additionally, some projects have run occasional promotions on specific units.
Reflecting on the market While the market has certainly improved in recent years, not every project can be called a winner and one really needs to think about the market as close to the project level as possible. The market still bears the scars of the financial crisis and Las Vegas’ building craze, however this has translated into opportunities for others and the market continues to cure itself with more solid borrowers and stronger equity positions. The capital groups that have purchased bulk units in the recent years have been professional and well capitalized, moving the market out of the distressed rut and back onto firmer ground. The region’s improving job market, strong hotel occupancies and visitor volumes also bode well for the sector. The Strip properties in particular are likely to be beneficiaries of both under construction and realistically planned projects, such as the nearly complete MGM-AEG arena and although starting out slow, Genting Group’s Resorts World Las Vegas is likely to help move the center of gravity of the Strip further north. The Las Vegas Convention and Visitors Authority’s plans for the former Riviera Hotel and Casino are likely to build more connectivity between the Strip Corridor and the Convention Center area. Additionally, Crown Resorts Alon plans a project on the New Frontier site. Carl Icahn has recently started seeking a buyer for the partially built Fontainebleau site so it will be interesting to see who purchases the property and what the ultimate plans may be.
Historical Sales Activity in the High-Rise Sector - Includes Builder Sales and Resales
Many of the spikes within the two trends below are due to delivieries of new product or a repositioned project.
Source: Clark County, Coldwell Banker Premier Realty.
Supply Additions and Cumulative Supply
Source: Clark County, Coldwell Banker Premier Realty.
lasvegashomes.com
Inventories UNITS
TOTAL CLOSED
FOR SALE MLS*
DEVELOPER OWNED**
LENDER OWNED
Boca Raton
378
176
5
202
1
One Las Vegas
359
70
20
289
-
TOTAL
737
246
25
491
1
SUBMARKET/PROPERTY SOUTH STRIP
RESORT CORRIDOR Allure
428
428
31
–
2
Sky Las Vegas
409
345
19
64
3
CityCenter Mandarin Oriental
225
223
18
2
–
CityCenter Veer Towers
669
530
68
139
–
TOTAL
1,731
1526
136
205
5
ADJACENT STRIP Metropolis
71
71
8
–
-
Park Towers
84
84
11
–
–
Regency Tower
274
274
23
–
–
Turnberry Place
777
777
66
–
1
Turnberry Towers
635
489
29
146
1
Panorama Towers I & II
650
650
61
–
2
The Martin
372
372
29
7
–
TOTAL
2,863
2,717
227
146
6
One Queensridge
218
218
28
-
1
TOTAL
218
218
28
-
1
SURBURBAN
DOWNTOWN Juhl
341
34
2
305
–
Newport Lofts
168
168
15
–
–
Soho Lofts
120
120
8
–
-
The Ogden
275
74
12
201
–
TOTAL
904
365
37
506
–
GRAND TOTAL
6,453
5,103
453
1,348
13
CityCenter Vdara
1,495
147
14
1,348
–
Palms Place
599
481
75
118
4
Trump
1,282
823
62
459
-
The Platinum
255
239
26
16
3
Turnberry MGM (Signature)
1,728
1,640
55
88
3
GRAND TOTAL
5,359
3,330
232
2,124
10
CONDO-HOTEL
* Active inventory, not under contract. ** Either owned by the developer or a new owner of multiple homes such as Dune or CIM. Further, the bulk sale of Veer is still considered in the developer owned category. Total Closed refers to all closings that occurred from project start date to the end of the current quarter that traded on a retail or resale basis.
Note: Much of the supply of developer owned homes are in the rental stock. Examples include One Las Vegas, The Ogden, Sky Las Vegas and Juhl.
SALES & PRICING
Beginning at 2005 when several condominiums became active
Strip Corridor
Adjacent Strip
lasvegashomes.com
Adjacent Strip
Note: Prices can vary substantially between sample periods. Prices reflect view and floor premiums and may also vary by finish level. Does not include recent bulk transactions.
Adjacent Strip
South Strip
lasvegashomes.com
Surburban
Downtown
Note: Prices can vary substantially between sample periods. Prices reflect view and floor premiums and may also vary by finish level. Does not include recent bulk transactions.
Condo–Hotel
lasvegashomes.com
Note: Prices can vary substantially between sample periods. Prices reflect view and floor premiums and may also vary by finish level. Does not include recent bulk transactions. Trump has sold units in bulk and those are not reflected here. The above exhibit corresponds to traditional arms-length (retail or resale) transactions.
RESORT CORRIDOR
Note: Still being marketed by the original sponsor. Sale price per square foot icludes grey shell.
ADJACENT STRIP
Closed
Developer ow ne d (m ay be rental )
On M LS
Le nder o wned
ADJACENT STRIP -Cont
SUBURBAN
Closed
Developer ow ne d (m ay be rental )
lasvegashomes.com
On M LS
Le nder o wned
DOWNTOWN
SOUTH STRIP
Closed
Developer ow ne d (m ay be rental )
On M LS
Le nder o wned
CONDO-HOTEL
Closed
Developer ow ne d (m ay be rental )
On M LS
Le nder o wned
Coldwell Banker Premier Realty Strategic Services John McClelland – Vice President of Research 702.938.1375 • john.mcclelland@cbvegas.com lasvegashomes.com 8290 West Sahara Avenue, Suite 200 Las Vegas, Nevada 89117 Coldwell Banker Premier has facilitated a multitude of high-rise transactions in Las Vegas. We draw on this experience and information obtained from local government and the Greater Las Vegas multiple listing service. The information is deemed reliable but is not guaranteed.