Appraisal Articles 2019 Free Appraisal Articles for Appraisers and the Public
Some properties located near or on the Las Vegas Strip are now ripe for development in that they could be transitioned into hotels, condominiums, high end retail or resort casino support uses in the near future. For a long time, prior to the 2008 stock market based recession, there were many Las Vegas properties approved for vertical development, some actually made it to development right as the market failed.
The real estate market has fought its way back and I have recently seen more marketing flyers circulating that display renderings of vertical buildings on them. The Las Vegas Real Estate market wants to return to the days when there were many announced and actually hi-rise buildings under construction.
My Las Vegas Strip appraisals have revealed the asking prices of properties that are soon to transition for Strip related development and are now ready for development or re-development.
The problem for some potential buyers of transitional, pre-development real estate is that buying near Strip and Strip land is expensive, it’s cost millions of dollars for small parcels, and even if someone can afford the $ 50 million plus to build a hi-rise building on it they are often not prepared for all of the other related costs like; zoning, planning, engineering and time lost (carrying costs) related to getting approvals in place. Development is a daunting, expensive and time-consuming process that few people are prepared for.
At $ 1 per square foot (SF) there are lots of buyers for real property but when you get into the $ 100 SF to $ 500 SF range there are few who can play. The marketing and exposure time related to selling a property of this type is also much longer than cheaper properties.
Of course on Strip located properties are in much higher demand than near Strip properties and thus real property with frontage on the Strip have higher asking prices.
Like vacant properties all over Las Vegas, buying pre-development Strip or near Strip properties, often with old, tear-down improvements located on them is considered to be risky and most lenders will loan to a maximum of 50% loan-to-value (LTV) on those properties. Some lenders don’t even want to participate at 50% because they just don’t want to own vacant or run down property that has values that high.
For appraisers it’s challenging because Strip and near Strip property values are so volatile. Everyone waits until the next greatest thing is completed, like the Las Vegas Raider’s Stadium then gages the demand and finally they adjust their asking price based on the new level of demand. Many property owners are currently waiting for the completion of the Stadium, it’s an imposing development but it’s hard to tell how much influence it will have if your property is ½ mile or more away.
There are over $ 15 to $ 20 Billion in Strip-related construction projects, including the Stadium, now underway and it is the opinion of many that some of the projects will have a strong positive impact on the Strip and on property values.
As a Las Vegas appraiser and broker I try to stay in touch with what is happening in the real property markets and the Las Vegas Strip influence market, they are different. The greater the perceived risk associated with a proposed real property project the more difficult securing financing will become, and the more volatile asking prices become.
For more appraisal information contact Glenn J. Rigdon MA, MRICS, IFAS, ASA who is a Las Vegas / Henderson Nevada based broker and appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas (http://www.appraiserlasvegas.com), or http://www.horizonvillageappraisal.com, or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at http://www.linkedin.com/pub/glenn-rigdon-ma-mrics-asa/1a/30b/879/
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