REAL ESTATE: Permit pulling fails to perk up construction sales


Housing permits are way up and construction is happening again on the Strip.

But you’d never know from the latest taxable sales numbers that the local building sector was bouncing back, however slightly.

Construction-related sales in Clark County totaled $44.4 million in June, according to the state Department of Taxation. That was down 9.2 percent from $48.9 million in June 2012. And it doesn’t even touch the $208.8 million in building-sector sales in June 2008, when the recession was 6 months old and the $8.4 billion CityCenter was under construction.

Sure, you wouldn’t expect today’s figures to look like numbers during local construction’s heyday.

But housing permits were up 30.8 percent year over year in the first six months of 2013, and they rose 47.1 percent in the 12 months leading up to June, statistics from local research firm SalesTraq show.

Plus, gaming operators are working on several big retail and entertainment projects on the Strip. Caesars Entertainment Corp. is building The Linq, a $550 million project next to the Flamingo. MGM Resorts International is spending $100 million to refashion the space between New York-New York and Monte Carlo into a retail, dining and entertainment district. And SBE Entertainment continues its $415 million demolition and renovation work on the former Sahara, which it’s transforming into boutique hotel SLS Las Vegas.

So what gives with June’s depressed construction sales?

Part of it was a 50 percent drop in spending on heavy and civil engineering construction, which is mostly infrastructure projects, said Steve Brown, director of the Center for Business and Economic Research at UNLV. And that falloff wouldn’t be an unusual trend.

“You usually don’t have a sustained high level of infrastructure spending when the economy’s just bumping along,” Brown said.

There’s also typically a lag — sometimes a year or longer — between permit pulls and groundbreaking.

“I think we’re still a little bit early in the cycle as it relates to the construction sector,” said Brian Gordon, a principal in local research firm Applied Analysis. “A number of commercial sectors have remained off in the past couple of years, and while new-home sales and prices are on the rise, the total volume of homes being constructed isn’t significant enough to warrant tremendous gains in material purchases at this point.”

Sales may pick up in coming months as bigger Strip projects break ground. For example, work still has to begin on Resorts World Las Vegas, the megaresort Genting Group of Malaysia plans to build for $2 billion to $7 billion on the former Echelon/Stardust site.

But it’s unlikely that local building-related sales will ever return to their halcyon days: Homebuilders are closing on roughly 600 homes a month, well below the 3,000 to 4,000 closings they averaged during the boom.

■\u2007Colliers International brokers helped close several big deals recently.

Robert Torres and Scott Gragson represented multiple landowners in the sale of five parcels totaling 24 acres to Zuffa Landco. Zuffa Landco is an affiliate of Zuffa, the parent company of Ultimate Fighting Championship. Zuffa bought the properties for $7.8 million, with plans to build a worldwide headquarters on the site, according to UFC Chief Financial Officer John Mulkey. Kevin Higgins of Voit Real Estate Services represented Zuffa Landco.

Ryan Martin , Patti Dillon, Tom Stilley and Lizz Stilley represented Fore Property Co. in its $1 million purchase of seven acres at 1601 S. Boulder Highway, as well as its $575,000 purchase of five acres at 993 Equestrian Drive.

Vincent Schettler represented Investor Equity Homes and Mosaic Land 2 in their $275,000 purchase of 2.1 acres of land at 8162 N. Tioga Way.

David Grant represent landlord E.S. & R.E. Berger Family Trust in its 60-month, $155,000 lease of 1,400 square feet to Subway Real Estate. The space is at 591-A College Drive.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512. Follow @J_Robison1 on Twitter.

 

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