With new construction sites popping up around Las Vegas, the market for the dirt underneath them is ramping up as well.
Last year was indeed the busiest in a while for people who buy and sell tracts of land. But like practically everything else in Southern Nevada real estate, the market still isn’t back to the bubbly days of old.
Investors bought around 3,284 acres of land in Southern Nevada last year, up 24 percent from 2015 and the most since 2006, according to figures provided by John Stater, Las Vegas research manager at brokerage Colliers International.
The average price per acre, however, fell 27 percent last year to $169,324, the lowest in more than 15 years.
The disparity, it seems, stems from some big purchases at Apex Industrial Park that cost a relative pittance, including, county records show, Faraday Future’s 930 acres for around $29.4 million.
(Construction of its much-hyped car-manufacturing plant at the North Las Vegas business park, backed by $335 million in state incentives, was halted in November after the startup reportedly missed multiple payment deadlines.)
Land sales haven’t climbed every year since hitting bottom in 2008, but buyers are scooping up far more parcels than they did after the market crashed. Average prices have been more volatile coming out of the recession.
All told, developers are buying land and building again – but they’re not paying jaw-dropping sums for dirt like they did in the boom years.
Stater says land is selling primarily to people who plan to develop projects, not to flippers, an all-too-common scenario during the bubble era when easy money was sloshing around.
“The banks are not handing money out like they used to,” he said.
Colliers recently released its year-end report on Southern Nevada’s commercial real estate market. Here’s a look at some highlights:
■ Las Vegas’ office market has been slowest to recover from the recession compared with other types of property. And while the overall vacancy rate has been slowly coming down, and landlords feel more confident asking for higher rents, investors still seem skittish.
Buyers picked up 56 office properties last year, marking the third consecutive drop in annual sales. The average sales price last year was $136 per square foot, down from $172 in 2015 but up from $129 in 2014.
■ Shopping-plaza investors also pulled back last year, buying 40 retail centers at an average price of $166 per square foot, compared with 58 sales at an average $184 per square foot in 2015.
■ The industrial market kept heating up, as the vacancy rate fell to 5.3 percent, the lowest since 2006, and the construction pipeline ended the year with 3.9 million square feet of projects being built – and another 7.1 million in planning stages.
■ The apartment sector didn’t slow either, as the vacancy rate fell to just 3.8 percent by the third quarter and average rents climbed to $948 per month. Landlords also bought 13,674 units last year, down 11 percent from 2015, but paid an average $99,316 per unit – up 38 percent.
Contact Eli Segall at email@example.com or 702-383-0342. Follow @eli_segall on Twitter.