Las Vegas Sun

November 20, 2018

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Expert: High-rise shakeout is likely

There will continue to be a shakeout within the Las Vegas high-rise market as some projects make it and others fall by the wayside, an industry expert said.

"Not everyone has the financial wherewithal and expertise to pull it off," Tim Sullivan, president of the Sullivan Real Estate Advisors, a Ryness Co., said during the Condos & Townhomes Magazine high rise conference Friday.

Many people were caught by surprise last week after the planned Krystle Sands condo-hotel tower stopped sales and scuttled the project after the Florida-based developer sold out to Turnberry Associates, which owns adjacent land and the nearby Turnberry Towers.

But if there was any concern that the interest in high-rise condominiums might be tapering off, attendance at the conference would quickly alleviate any fears.

More than 800 people packed one of Bellagio's ballrooms conference, some of whom had been waiting since 5 a.m. to assure themselves a seat, said Gail Krystal, sales/marketing with the magazine.

A dozen developers paraded before the crowd, each pitching their project in hopes that real estate agents, developers, analysts and others in the crowd would see the uniqueness of their vision -- and that the vision will happen.

Despite the inevitable shakeout, Sullivan said the high-rise market in Las Vegas is here to stay.

"It is a natural evolution of the housing market," he said.

Of the high-rise projects in the pipeline -- estimates have ranged anywhere from 40 to more than 100 throughout the valley -- Sullivan said approximately one-third of the projects are well financed and will most likely come to fruition, another third are up in the air because of the lack of financing and another third are pure speculation.

Construction costs, which increased 30 percent last year and are expected to still go higher and a severe shortage of construction labor also has affected and will continue to affect projects throughout the valley, Tom Schoeman, president of JMA Architecture Studios, told the crowd.

"The sales activity has not reflected that change in the market," he said, elaborating that prices need to catch up to the new conditions.

Despite the challenges, buyer demand is real and it's here, Schoeman said.

"There is no other city in the country that so many people want to be a part of," he said.

Developers and project representatives did their best to convince the crowd that their projects were going to happen.

Victor Altomare, who plans to develop the Liberty Tower and Summit condominium towers, said he and his partners have a "responsibility to make this project happen."

Alan Schachtman, with Allure Las Vegas, two condo towers planned for the northwest corner of Sahara Avenue and Las Vegas Boulevard, said their project is a "safe bet."

"Allure is actually one that will happen; it's fully funded and we are now in for permits," he said.

Developer Michael Jabara also took advantage of the conference to elaborate on plans for his two towers at the site of the Scandia Family Fun Center, 2900 Sirius Ave. at Rancho Road.

Jabara's project, two 50-story towers with 350 units each, was approved in November by the city of Las Vegas. Boston-based the Congress Group is developing the project, to be called Opus Las Vegas.

"It will offer a metropolitan lifestyle for people who really want it all, great views, easy access to nearby neighborhood amenities, but at the same time it's an urban project," he said.

Jabara said he expects construction to begin during the first quarter of 2006 with completion planned for the second quarter of 2008. Scandia Family Fun Center will close Sept. 6, he said.

Units, which will range in size from 700 square feet to more than 4,000 square feet, will be priced from $200,000 to more than $4 million.

Kirby Presswood, a real estate agent with Prudential Americana, said in her 12 years in real estate in Las Vegas, she never imagined a high-rise boom would, or could, take hold.

"It's unbelievable, it's all the phone calls I get anymore," she said after the conference. "I've actually purchased some myself."