CEO Jerry Peterson stands Thursday in front of the first phase of construction of the Boca Raton condominiums on the south Strip. Photo by John Gurzinski.
The slowdown in Las Vegas' single-family housing market has been well documented over the past several months, but the trend toward mid-rise luxury condo living continues to gain momentum.
Several mid-rise projects are taking shape on the south Strip, the area of Las Vegas Boulevard from Sunset Road to St. Rose Parkway.
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Gemstone Development has received a certificate of occupancy for the first building at Manhattan, Boca Raton has nearly completed its seven-story steel framework and Loft 5 is on track for move-in early next year. Centex Destination Properties is grading 15 acres for the first phase of Urban Village.
Las Vegas leads the country in many growth categories and people still want to come here, Centex Destination spokesman C.J. Julen said Thursday.
"Vegas has slowed down ... no. Are you kidding? It's remarkable how well it continues to perform on a day-to-day basis," he said.
Centex purchased about 15 acres of the 50-acre Urban Village site for $38 million and has an option on the rest of the land with a significant deposit down, said Tom Jacobson, vice president of development for Centex Destination.
Reservations have been made on more than 300 of the 464 brownstone units coming in the first phase, priced from $360,000 to $760,000 for one to three bedrooms. Roughly 60 percent of the buyers are local and 30 percent come from Southern California, sales director Chat Wynne said.
Gemstone is planning Manhattan West, a new urban village near the Las Vegas Beltway and Russell Road, said Mark Chatow, vice president of marketing for Gemstone.
The company spent $38 million to acquire and begin the development process for 20 acres between Russell and Oquendo Road. Plans call for 750 warehouse-style lofts and residential units, 100,000 square feet of office space and 40,000 square feet of retail.
Jerry Peterson, managing partner of Boca Raton, said he was fortunate to get into the Las Vegas market early and line up $126 million in construction financing with J.P. Morgan Chase bank. The first phase of two buildings and 378 units is 75 percent sold, he said.
"The market is changed. It's slowed down," Peterson said. "People are looking at a project two, three, four, five times before they make a decision, and they're looking at other projects, as well. They're being very careful."
Boca Raton's price point of $450 to $500 a square foot seems to be in line with other steel and concrete structures and the project is attracting a lot of second-home buyers from out of town, he said.
It would be unrealistic to believe the market could absorb the entire potential inventory of luxury condos in the pipeline today, Jeremy Aguero of Las Vegas-based research firm Applied Analysis said.
The pool of buyers is large, but they're more skeptical about projects, he said.
"With relatively recent speculation about project suspensions and cancellations, several projects have witnessed a material decline in the number of investor purchasers," he said. "However, the number of second-home buyers and leisure traveler purchasers has held their ground. End users for the units will ultimately dictate the long-run success for many projects."
