Appraising Vegas High-Rise Condos 101

Here are a few important factors considered by appraisers during the appraisal of a luxury high-rise condominium.  Of course location is important, but before you get far you really need to know what type of property is being appraised.  It's a condo right?  Maybe, it could just be a condominium or it could be a condo-hotel.  Many non-appraisers don't know the difference.

Appraisers take care to consider comparable sales in the sales approach of their appraisal reports that were sold with cash or cash equivalent terms.  Sales with atypical, non-cash terms must be adjusted.

While appraising real estate is not the most glamorous jobs in Las Vegas, there are some perks. One of them is getting to see many of the new high-rise condominium buildings, the different units including penthouse units, and sometimes appraisers even get to see the units before the buildings are opened to the general public.  Here are some quick tips for making comparisons like an appraiser:

1. Of course you compare location, location is an important consideration in all real estate appraisals and it is a very important factor when considering condominium units. Central Las Vegas Strip locations are always better than off-Strip locations.

2. Compare the quality of construction, some buildings, like Trump Tower, are finished to the same high quality standards that the best casinos achieve. In fact, the lobby of Trump Tower could confuse you into thinking that you are in one of the top casinos in town. Many condos have first class finishes and come completely furnished while others have exposed interior pipes and are sold in what is effectively a "gray shell" state with little or no finish.

3. It is obvious, even to non-appraisers, that there is value associated with a Las Vegas Strip view and the better the view the greater the premium that individuals are willing to pay for it. Penthouse condominium units on the top floors generally have the best views and if there is no one living above you, you are at the "top of the world" so to speak, and you will pay for that privilege. So comparing the relative location of a condo within the building is also important.

4. As noted you need to know if a project a condominium project or a hotel-condominium project.  Hotel-condos generally include units that are rented out to the public like hotel rooms and that difference can change the character of a unit in that as a condo-hotel unit usually has a much higher income potential.  As you can imagine condo-hotels have a much different use intensity and tenancy mix.  Some condo-hotel buildings have one to several floors that have been sold to a single owner and their finish and occupancy may differ from others within the same buildig.  Comparing condos to hotel-condos is not an "apples to apples" comparison.

5. Consider the amenities associated with the condo.  Is there a roof top pool, spa, exercise area, restaurants, private covered parking, valet, business center and private library? The list of amenities can be long and some features add value while others may not.  Talking to buyers and agents in the market will keep you in touch with what adds value.

Of course there is a lot more to appraising high-rise condos and condo-hotel units than that but this list hopefully gives you some starter criteria.

Among some of the most recently completed high-rise projects is Allure, which is located just west of the Las Vegas Strip on Sahara Avenue. Allure is a 41-story building and it has 15 floor plans. Some of the other recent offerings include; Streamline Tower (Downtown), Sky Las Vegas (Strip), Newport Lofts (Downtown) and Boca Raton (South Strip).

I have found that the best accumulation of Las Vegas high-rise building and condominium information and related links is available at the Vegas Today And Tomorrow Internet site at (http://www.vegastodayandtomorrow.com). Since it's not a broker owned site, you can cruise it without a lot of pop-ups and invasions of your privacy. The site also includes some of the best Las Vegas maps available anywhere.

Of course, as I already said, there is much more to appraising units than that.  Its important to understand that some buildings are substantially controlled by the original owner / developer.  It may have some foreclosure or REO sales that were at relatively low values but there may be no others and the only offering is at twice what the last REO sales price was.  It's all about supply and demand and with limited supply in any one building things can change quickly.

For more appraisal information contact Glenn Rigdon, MA, MRICS, ASA a Las Vegas / Henderson Nevada appraiser via email or via his business website Horizon Village Appraisal (http://www.horizonvillageappraisal.com), or you can also click on “Contact Us” on the home page of this website.

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