Appraisal Articles 2018 Free Appraisal Articles for Appraisers and the Public
I have discussed the valuation of Las Vegas Strip properties in the past and how that market stands alone unto itself. The Strip has its ups and downs over time as anyone who follows the news well knows, but those swings are not always in sync with the local Las Vegas / Clark County commercial real estate market.
Land values on the Las Vegas Strip often run at least ten times higher than the prices being paid for the most well located off-strip parcels. Valuing land is straight-forward, you can usually find out what was paid and discover the upward or downward trend line and conclude a credible value.
When it gets to finding a market rental rate valuations become more complicated. Off-strip Las Vegas you can find a small retail space for a monthly rental rate from about $ 1.00 per SF per month NNN (in an off-arterial strip center) to a relatively high $ 4.00 per SF per month NNN (in Town Square) but on the Las Vegas Strip a retail space that has the same size may rent for $ 70 per SF per month NNN to $ 100 per SF per month NNN. That may sound outrageous when you think about it, paying $ 21,000 per month to $ 30,000 per month for a 300 SF space, but it’s all about pedestrian traffic. If a landlord, like a casino / hotel, can deliver to your retail location tens of thousands of pedestrians each and every day how much profit would you make?
Properties with established income levels have value based on the anticipated cash flow and the risk associated with sustaining it. Things on the Las Vegas Strip become popular but generally not for long since the whims of the public change and what was once highly profitable can become less so. There is a timeline for the popularity of attractions and anyone who has tracked them can give you a general idea of how long things last.
Casino / hotels have remained viable well beyond their projected life-expectancy, but ancillary attractions no matter how costly, generally have a much more limited life. How many of us remember having walked the MGM Theme Park and ridden on its rides?
The Las Vegas Strip is constantly reinventing itself. People slow down their gaming and the emphasis switches to retail and entertainment. If preferences change Las Vegas will change with them. Appraisers understand how it works, what was once a billboard site making hundreds of thousands of dollars a month can be sold for a multi-billion-dollar casino location. It’s market economics at its purest and only the profitable survive.
Since the Las Vegas Strip is dominated by a relatively few publically traded corporations there is relatively little work that comes from it to the local Las Vegas or Henderson commercial appraisers, but there are times when we do have a chance to see the number and express our opinions.
For more appraisal information contact Glenn J. Rigdon MA, MRICS, ASA is a Las Vegas / Henderson Nevada based appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas (http://www.appraiserlasvegas.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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