Hot Las Vegas Real Estate Market May Cool Other Segments of Economy
The Las Vegas real estate market has been performing extremely well,
partly due to high land prices and soaring demand.
However, In Business Las Vegas reports that the effects of high land
prices on the industrial segment of the local economy may be less than
beneficial:
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.
Local industry proponents caution that if commercial land continues to
be "down-zoned" for residential use, it could have a negative impact on
the job market in the area.
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