Wednesday, September 28, 2011

Increased demand driving new development in Las Vegas’ core

A view of the Newport Lofts condo building in downtown Las Vegas on Thursday, Dec. 16, 2010.

A clip from Joe Schoenmann with the Las Vegas Sun:

Real estate specialist Jack LeVine has during the past four months seen an intense and growing interest in downtown real estate.

It reminds him of the mid-2000s boom, when on the first day a home was listed for sale, 10 potential buyers would offer bids.

Something similar has happened in recent months, he says.

Prices today are far below the $100-$200 per square foot they were during the boom, but offers are coming in at more than the asking price, according to LeVine.

“I have a stack of buyers who want to buy downtown,” he says, listing them by occupation — a federal public defender, electrical engineer, museum curator, federal prosecutor, schoolteacher and artist, exotic dancer, freelance writer, Las Vegas city employee, a Zappos employee.

“This is the creative class, that’s who’s contacting me,” he said. “These are Baby Boomers whose kids are grown so they want to move downtown; these are people who don’t want to live in the ’burbs anymore.”

The rising prices haven’t lifted sales-price statistics, LeVine said, because so many are being sold by banks, which are less interested in getting top dollar. If a bank can get cash today at a lower price instead of waiting for a higher price with a 15- or 30-year mortgage, banks are taking the cash
But the interest in downtown is being reflected in other ways, including projects experts believe will bring the amenities that have kept many from considering living in the area.

In April, Newport Lofts sold out. The 168-unit high-rise project at Hoover Avenue and Casino Center Boulevard was built in 2007

This month, the Las Vegas City Council approved plans for 240 apartments at Casino Center and Coolidge Avenue by New York developer Barnet Liberman.

Liberman hopes to start construction next summer on the project that will be paid for in part with funds from the U.S. Department of Housing and Urban Development’s transit-oriented development, or TOP, program. The project will feature affordable units with a 680-square-foot, one-bedroom apartment going for about $850 a month and a 920-square-foot, two-bedroom priced at $1,100 to $1,200 a month.

“That’s what you need for a city to grow is rental housing,” said Liberman, who has been involved in urban development for decades, including the first loft conversion in Manhattan in 1977.

“There shouldn’t be any barrier for lower-income people to be able to grow and prosper,” he said. “The only question for developers, guys like myself, is they’ve got to know that there’s a real solid, almost certainty that if they do A, B and C, then they get D. When you see that the city is behind you in terms of a common goal, it helps eliminate some of the risk.”

After his 240-unit building is finished, Liberman wants to begin construction on a 24-story, 1,150-unit apartment building on Charleston Boulevard at 4th Street. The City Council is expected to hear more about that during a meeting in November.

Other developers also believe affordable housing is crucial in the push for downtown’s redevelopment.

Richard Worthington, president and chief operating officer of the Molasky Group of Cos., envisions affordable housing downtown attracting the smaller shops needed for an area to thrive.

“This will just drive that kind of development, bring in the amenities needed downtown,” he said.

John Tippins, Northcap LLC owner and senior vice president at ST Residential, which owns and operates mid- and high-rise condos and multifamily properties, including the Ogden high-rise downtown (now 83 percent occupied), agreed with Worthington.

“You’ve got to have heads in beds,” Tippins said. “When people can actually live downtown, that’s the important thing to keep the momentum, which is snowballing right now.”

In some ways, the past and future of downtown’s turnaround is the same: The amenities are the thing.

Early last decade, when high-rise plans dotted maps of downtown on the city’s website (very few of those got built), doubts focused on the lack of grocery, hardware and other basic stores in the area. The suburbs are chockablock with theaters and hardware stores and supermarkets, so the living is easier.

The equation for downtown hasn’t changed much over the past six or seven years, says Robert Fielden, an urban planner and architect in Las Vegas for almost 50 years.

“There are bars and taverns, but most people don’t want to sit in a bar every night as entertainment,” Fielden says. “You need things for the average person to do. A library that is relatively close, neighborhood parks and green belts, theaters, dining that is affordable, the mom-and-pop kind of stores.”

Those simple amenities “are going to be so important because of the competition with everything out in the ’burbs.”

Still, real estate agents like LeVine are seeing growing demand for homes downtown. From his vantage point, “people are just waiting for homes to become available.”