Couple shells out $3.9 million for unfinished Las Vegas penthouse

It took husband and wife Rob and A.J. Tuttle half an hour to walk around the unfinished penthouse for sale at the top of Panorama Tower II.

Of course, at 14,176 square feet, it might take you awhile, too. How big is 14,176 square feet? Picture nine average Starbucks stores laid side by side.

But the Tuttles must enjoy a stroll, because they plunked down $3.9 million last week to buy the place, across Interstate 15 from CityCenter. It’s the biggest single-floor, unfinished high-rise purchase on or around the Strip.

The sale is more than a record, though. It’s a microcosm of local economic trends, wrapped into one huge housing deal. Vaporized home equity? Check. Surging investor demand for homes? Of course. Dwindling supply and rising property prices? Naturally. New tech-oriented business looking to tap California markets? Yep, even that.

Consider plummeting equity. A foreign investor first bought the condo in September 2007 for $10.43 million. The Tuttles’ $3.9 million purchase meant a 63 percent haircut for the original buyer. Simply put: Ouch.

Then there’s investor demand, shrinking inventory and rising prices, which have gotten attention in single-family suburbia, but not so much the Strip condo market.

In a dozen towers on and around the Strip, the Tuttles’ real estate agent, Di Lewis, counted 180 available units with no offers as of Monday, down from nearly 1,000 units cited in a 2008 Review-Journal article.

And while the Tuttles got a steal in comparison to their unit’s initial boom-era purchase price, the submarket’s fortunes have risen short-term. Both sales and sale prices have jumped
30 percent in the past year, Lewis said; one owner bought a 943-square-foot unit at Panorama Towers in December 2011 for $173,000 and flipped it in February for $237,000.

“People have an appetite to step up. They don’t think the risk is there now that was there before,” Lewis said. “Nobody is building new high-rises, and they won’t for some time. It would cost more to build than what people could buy for.”

Finally, to quicken the pulse of economic-diversification types, the Tuttles said they’re relocating to Las Vegas partly to expand their communications business, Volo Recovery, which provides virtual backup switchboards and other communications infrastructure for businesses during natural disasters or special events.

The company’s mission fits with the data centers, server-collocation farms and other disaster-recovery businesses moving here for the city’s relatively low-cost electricity and general freedom from the whims of Mother Nature. It also gels with goals of the Governor’s Office of Economic Development, which lists business information technology as a recruiting sector.

Tuttle, who has visited Las Vegas since the 1980s to help resorts with computer databases, said he sees Las Vegas as a regional base for new West Coast markets. He said the fact that he could work with California companies while avoiding California income taxes is a huge plus.

It’s not the first time the Tuttles have invested here. They bought a townhome at Lake Las Vegas in 2007 as a vacation spot and lost money on it. They still own it, though, and the best way to recoup is “to double down,” Rob Tuttle said.

“For us, Vegas is on the rebound. It’s a good decision,” he said. “It’s not something we’re buying as an immediate investment. But for my family, it will pay dividends for a long time. The family will be able to use it for years, and if we decide to make a change at some point, it will be a good investment.”

The Tuttles will keep their 5-acre spread in Ormond Beach, Fla., “to maintain something green,” Tuttle said, but as soon as the Panorama penthouse is ready, after about 18 months and $3 million to $4 million in build-out costs, he expects to move in, with A.J. and their five children, ages 13 to 18.

“I think we represent the fact that the fear is gone. There have been people looking for investment opportunities (around the Strip) and holding off because they’re afraid. I think we’re seeing investors get over their fears,” Tuttle said. “We’re really excited. We’ve been in love with Las Vegas for 30 years, and I kind of feel like we’ve grown up with the town. I feel like we belong there.”