Las Vegas Real Estate Could Overwhelm Local Industry

Las Vegas real estate has been so hot that it has pushed up local land prices to the point where local industry worries it will not be able to compete. The following is an analysis from In Business Las Vegas:

During the first quarter of 2005, the industrial market remained strong, but brokers, developers and users of space continue to worry about the effect of land prices on the market sector.

Land prices continue to increase, causing some developers, particularly those building distribution space, to enter (or propose) joint ventures with property owners, Kevin Higgins, senior vice president of Voit Commercial Brokerage said.

"In order for certain developers to afford these new pricing levels, profit-sharing with land owners is the vehicle to continue developing real estate," he said.

Developers also are looking at projects that include more showroom and office space, rather than straight industrial warehouse, to justify land costs and rent, said Mike Lyons, senior vice president of NAI Horizon's industrial division.

The excellent job market has long been a sustaining factor behind the Las Vegas real estate boom. However, analysts caution that much further "down-zoning" of commercial space for home construction could negatively impact prospects for industry, and thus for employment.