Vegas Five-Tower Project Begins - Tuesday 11th of April 2006
by Hubble Smith
Las Vegas Gaming Wire
LAS VEGAS Chet Nichols hears a lot of talk about the demand for high-rise luxury condos as second homes for people coming to Las Vegas.
"How many people can really afford to buy a $750,000 home that they use six weeks out of the year? When someone does that, they're really investing," said Nichols, executive vice president of Las Vegas-based Amland Development.
Amland, in a partnership with international developer B.S.R. Group of Israel, is building One Las Vegas, five towers with 890 residential units planned for nearly 20 acres on Las Vegas Boulevard south of Windmill Lane.
Nichols said One Las Vegas caters to people who live or spend a considerable amount of time in Las Vegas and who understand condominium living and the values provided through economies of scale.
The $142 million first phase is under construction with grading, excavation and underground utility work at the site. J.E. Dunn Construction of Kansas City is the general contractor.
The master plan calls for five 18- to 21-story private residential towers, 200-room boutique hotel and 200-unit condo-hotel to be operated by the same company, a 20,000-square-foot health club and spa, two restaurants and retail services.
The condominium market in Las Vegas Valley has expanded to 62,600 potential residential units, local research firm Applied Analysis reported for the fourth quarter.
More than half of them, or 33,800, are planned for the Strip resort corridor, and 11,700 units are proposed for the suburban markets, 8,600 are downtown and 8,500 are on the South Strip, including One Las Vegas.
Jeremy Aguero, principal of Applied Analysis, said there is insufficient market demand to absorb all of the units in the development pipeline. He predicts that 35 percent to 40 percent of the projects will move forward by 2010.
Several projects have been canceled, including Krystal Sands, Aqua Blue and Liberty Tower. Others, such as Ivana Las Vegas, The Curve and Las Ramblas, have stalled or halted sales.
That's not an unusual circumstance in an emerging market such as Las Vegas, which has a relatively low ratio of condos to single-family homes compared with other resort destinations, Aguero said.
"We believe that of the 61,000 units either under construction or planned for future development, approximately 16,000 units have been sold or presold," he said. "That having been said, the pace of sales has started to show signs of softness as foot traffic at sales offices, unit reservations and the number of contracts are slowing."
Nichols said financing for One Las Vegas has been in place for weeks with Corus Bank of Chicago and roughly 50 percent of the first phase has been presold. The first two towers are slated for completion in December 2007. Units are selling for $550 a square foot on average, from the $400,000s for a one-bedroom, 850-square-foot unit to $1.8 million for a 2,850-square-foot penthouse.
"The difference between the Nasdaq bubble in the 1990s and the condo bubble here is demand is overstated by investors," Nichols said. "We don't cater to investors. Our true buyer is anyone who wants to shorten their commute and if you want to be amongst your own demographics. That's what got me into condos in the first place."
Amland built the midrise Park Avenue luxury condos off Las Vegas Boulevard at Agate Avenue and is doing high-end condos and custom homes at Prima in Lake Las Vegas.
B.S.R. Group has built 26 high-rise projects around the world, including the Toyota Tower in Tel Aviv and Waterfront Square in Philadelphia.
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