Las Vegas Homes Market Drives Up Land Prices, Affects Industry
Las Vegas homes have been going up at a feverish pace thanks to extremely high demand. The result has been a shortage of land and climbing land prices.
A recent article in In Business Las Vegas notes the effects of these high land prices on the industrial portion of the economy:
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.
Industry people worry that continued “down-zoning” of commercial land for residential construction could have an increasingly negative impact on the ability of local industry to compete. A loss of industry could lead to a downturn in employment, which has long been a driving factor behind the buoyant Las Vegas home market.