Published Thursday, Nov. 11, 2010 | 9:56 a.m.
Updated Thursday, Nov. 11, 2010 | 12:02 p.m.
A site along the Las Vegas Beltway where a proposed mixed-use condominium development on 44 acres never got built has been foreclosed upon.
The 44 acres is the site of the proposed development known as The Curve between Sunset Road and Durango Drive. It was to include two 18-story condominiums with 376 units, more than 115,000 square feet of retail and more than 60,000 square feet of office space above the retail.
Like a lot of proposed projects in the valley, it never got built because of a lack of demand and the weak economy. It was a project of several Las Vegas businessmen, including former Mandalay Resort Group Vice Chairman Bill Richardson and M.J. Dean Construction owner Michael Dean, and others.
Applied Analysis Principal Brian Gordon said many projects found themselves in a similar position and rather than proceed, they cut their losses and stopped. Lenders have realized their best alternative was to go ahead with foreclosures and dispose of those assets, he said.
“When you had projects that were programmed with high density and high-rise development, the (economics) didn’t support many of them and they ultimately failed,” said Applied Analysis Principal Brian Gordon. “What we are seeing in the wake of those failed projects is evident today with foreclosure proceedings taking place at many of the sites.”
SDSW2, the apparent holder of the note, acquired the property through the foreclosure process by holding a lien that allowed them to take possession, Gordon said. The value at which the property was transferred was about $450,000 an acre. One transaction was 39.21 acres transferred for 18 million or $459,100, an acre, Gordon said. The other was 4.2 acres for $2 million or $414,900 per acre, he said.
The price does not necessarily set the value of the market or properties in the area, Gordon said.
One quarter after reaching its lowest point in eight years, land prices edged up in the third quarter, but demand remained weak, Applied Analysis reported.
The $212,101 per acre paid for land during the third quarter was 13 percent higher than the $187,779 paid in the second quarter, the firm reported.
But analysts caution against reading too much into the numbers because only 454 acres changed hands in the third quarter, down from 744 acres in the second quarter and because of the 44 acres that's part of a foreclosure proceedings.
There were no transactions along the resort corridor in the third quarter.
Since the peak of the market in the fourth quarter of 2007, land values outside the resort corridor have fallen 77 percent.
Demand for raw land remains limited with 16,000 homes on the market and 35 million square feet of commercial space vacant, Gordon said. That continues to put downward pressure on prices, he said.
“Recent transactions are likely being picked up by investors who maintain a longer-run vision and are more willing to ride out the downturn,” Gordon said.