The past three years of development in the Southwest part of the Valley have been incredible and unprecedented to say the least as just five short years ago the market was still in the depths of the recession. Not many had any confidence that the market would ever come back as most projects were mothballed and there was no light to be seen for new development. A couple of years later, confidence in the area was on the rise and sunshine was starting to peak through the clouds. This new found activity was three fold, and the main reason for the success was a return to the fundamental reason of location. The Southwest was the best location for new development due to 1.) The infrastructure of the Beltway 2.) Its proximity to the resort corridor and McCarran International Airport and 3.) Its geographic location between the two largest Master Planned communities of Green Valley/Anthem and Summerlin.
Phase 1. Single Family Home Builders acquired nearly 350 acres that will consist of approximately 1,600 homes that will house approximately 4,000 new people in the next couple of years. The development of these homes is approaching nearly 50% build out as there was enormous pent up demand for new product as there was very little product developed from 2010-2015. The new product was built at a lower cost due to lower land costs and this enabled builders to construct better product for less money as well as a better location than during the tail end of the boom years of 2005-2008. Land prices paid by the home builders were in the $375,000-$450,000 price per acre range. In my opinion, there will be very few properties within a mile of the beltway owned by the private sector that could be sold for future single-family residential development due to the increased value of the existing vacant land. The only land that might be purchased for single-family residential in the beltway will have to be auctioned off by the Bureau of Land Management (BLM) through the CMA auction process.
Phase 2. Multi-Family Developers acquired nearly 100 acres that will consist of approximately 2,500 multi-family apartment units. The product and asking rents will differ from project to project, but if all are successful, we should see an influx of approximately 5,000 new tenants in the immediate area that will most likely work, shop and send their children to the several new charter schools opened up in the area in the past two years as demand has increased.
Phase 3. Office, Industrial, Retail Users have acquired and developed (or are in the construction process) over 200 acres of commercial property. The bulk of this development consists of corporate headquarters, furniture stores and automotive dealerships that desire high visibility and wanted Beltway frontage. Ultimate Fighting Championship (UFC), Scientific Games, Ainsworth, Credit One Bank, Ikea, Dodge/Jeep, Hyundai, Subaru, Switch and soon to be Walker Furniture are among the more prominent names popping up on the beltway and these companies will house more than 3,000 employees in the next 12-months.
Phase 4. Future Development will most likely be a mix of Corporate Offices with some retail and probably an evolution of residential product that will be a mixture of “for sale” and “for rent”. This product will be built in a mixed-use environment that may or may not be vertical and will probably be 5-stories or more with podium parking. As the area matures, I think people will want a lifestyle that mixes both work with commercial services that are walkable, pet friendly and which have an emphasis on an active adult life-style with safety and cleanliness as a priority.
Let’s all hope that all the efforts of the last 10 years of diversifying the economy will truly make the next wave of development an evolution in product design as the rising land costs and lack of land availability drive developers to introduce the different product types seen in Phoenix, Denver, Portland, Austin and other cities evolving with the future as more people desire a “live, work, play” environment without having to get into a car to do so.
Scott Gragson, Executive Vice President
Direct +1 702 836 3730 | Mobile +1 702 595 1010 | Main +1 702 735 5700 | Fax +1 702 948 6388