Las Vegas High Rise Winter 2015

WINTER 2015

I-15

I-15

215

215

95

515/95

CONDOMINIUM

CONDO-HOTEL

CityCenter-Mandarin Oriental-Veer Towers-Vdara

Sky Las Vegas

Allure

One Las Vegas

Boca Raton

Panorama I & II

The Martin

One Queensridge Place Newport Lofts

Soho Lofts

Juhl

The Ogden

Turnberry Towers

Regency Tower

Signature (Turnberry MGM)

Trump

Palms PlacePlatinum

Park Towers

Metropolis

Las Vegas Valley

HIGH-RISES

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-RISES

lasvegashomes.com

Las Vegas Valley

HIGH-RISE TIMELINEApproximate Dates Closings Began

lasvegashomes.com

Update on the

LAS VEGAS HIGH-RISECondominium Market

YEaR-OvER-YEaR COmpaRIsON - mLs

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 pRICEs musT bE vIEWEd WITh CauTION duE TO ThE vasT dIffERENCE IN ThE sIzE Of hOmEs sOLd bETWEEN ThE TWO pERIOds.

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.

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

past couple of years and high-rise homes have largely lagged that cycle but do

appear to be gathering some more organic interest by owner occupants, some

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

lasvegashomes.com

sOuRCE: mLxChaNgE.

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 twenty-

first 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.

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.

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.

lasvegashomes.com

Historical Sales Activity in the High-Rise Sector - Includes Builder Sales and Resales

Supply Additions and Cumulative Supply



maNY Of ThE spIkEs WIThIN ThE TWO TRENds bELOW aRE duE TO dELIvIERIEs Of NEW pROduCT OR a REpOsITIONEd pROjECT.

Inventories

SUBMARKET/PROPERTY

SOUTH STRIP

RESORT CORRIDOR

CONDO-HOTEL

DOWNTOWN

SURBURBAN

ADJACENT STRIP

TOTALCLOSED

FOR SALEMLS*UNITS

Boca Raton 378 176 5 202 1

One Las Vegas 359 70 20 289 -

TOTAL 737 246 25 491 1

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

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

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

One Queensridge 218 218 28 - 1

TOTAL 218 218 28 - 1

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

LENDEROWNED

DEVELOPEROWNED**

* 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.

lasvegashomes.com

Strip Corridor

Adjacent Strip

SALES & PRICINGBeginning at 2005 when several condominiums became active

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.

lasvegashomes.com

South Strip

Adjacent Strip

Surburban

Downtown


lasvegashomes.com

Condo–Hotel


Trump has sold units in bulk and those are not reflected here. The above exhibit corresponds to traditional arms-length (retail or resale) transactions.

Note: Still being marketed by the originalsponsor. Sale price per square foot icludesgrey shell.

Closed Developer ow ne d (m ay be rental ) Le nder o wnedOn M LS

RESORT CORRIDOR

ADJACENT STRIP

lasvegashomes.com


ADJACENT STRIP -Cont

SUBURBAN

DOWNTOWN

SOUTH STRIP


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.

Coldwell Banker Premier Realty Strategic Services

John McClelland – Vice President of Research702.938.1375 • [email protected]

lasvegashomes.com8290 West Sahara Avenue, Suite 200

Las Vegas, Nevada 89117

Las Vegas High Rise Winter 2015

Documents