December 24, 2016 - 2:04 pm
Summerlin re-emerged in the national spotlight in 2016, and developers of the 26-year-old master-planned community are relishing the role it will play in Southern Nevada over the next two decades.
The community projects it will end 2016 with 650 new home sales, its most since the Great Recession and cementing a No. 1 ranking in the Las Vegas Valley. Executives of The Howard Hughes Corp., who said Summerlin will sell even more homes in 2017, have outlined a two-pronged strategy to grow market share in the future by not only offering even higher-end homes on hillside lots but smaller and more affordable housing in the flatlands.
RCLCO, a national real estate consultant, said in its July midyear report Summerlin ranked No. 4 in the nation among master-plan home sales. That’s quite a rebound for Summerlin, a perennial No. 1 from 1992 to 2003 that had fallen to 25th in the nation in 2011.
More than 6,000 of the 22,500 acres that make up Summerlin are available for development. The community, home to about 100,000 people, has entitlements to build 40,000 more housing units and could double its population.
“One of the things that’s always an issue with Summerlin because of the 26 years of development is a lot of folks think we’re done and that there’s not much more to go,” Summerlin president Kevin Orrock said. “The fact is we have another 20 years to go. The best is yet to come.”
Summerlin announced it will open nine new neighborhoods in 2017, seven of which offer detached homes and two that offer attached products. With 21 subdivisions open today and some scheduled to close out in 2017, the community could have 25 to 30 subdivisions selling homes next year, up from 10 subdivisions in 2011.
“We have almost tripled the number of subdivisions and product available in Summerlin,” Orrock said. “That’s how much has happened over the last five or six years in this community. The progress has been tremendous and the rebound has been phenomenal.”
On the commercial side, a hockey practice facility for the NHL’s Vegas Golden Knights, an expansion franchise that will start play next fall, is under construction and will open near Red Rock Resort. Talks stalled in 2016 with Clark County for financing a new minor league baseball stadium in Summerlin for the Las Vegas 51s. Howard Hughes Corp. owns half of the team.
“There are ongoing discussions,” Orrock said. “It’s a public-private enterprise. We hope that the baseball team will have a new home at some point.
The co-location of a minor league baseball stadium and hockey facility would be tremendous.”
CRATE & BARREL IN ’17
The 106-acre portion of Downtown Summerlin that includes 1.4 million square feet of restaurant, retail and entertainment options will get a Crate & Barrel in 2017. Downtown Summerlin has an occupancy rate exceeding 90 percent and more than one million visitors each month, said Brian Gordon, principal of Applied Analysis.
Some 70 percent of the 200,000 square feet of office space at Downtown Summerlin is leased and most of the remainder should be leased in 2017, Orrock said. Hughes Corp. is considering breaking ground on 150,000 square feet of high-end office space near the hockey facility as part of 400 acres of its greater downtown that extends north to Charleston Boulevard and includes Red Rock Resort.
On the residential side, Orrock said Summerlin remains in a good position to fill the void of new home demand in the valley that’s otherwise constrained by the lack of available land. Summerlin has single-family homes to townhomes priced from the $300,000s to more than $2.5 million. Luxury apartment homes offer monthly rents starting from the $900s.
“The community has been pushed to the higher end with an average of about $550,000,” Orrock said. “We will push that down and try to introduce the smaller product that will bring the price down. We have done very well with the product we have, but we’re always looking to expand our market. I think we can do it by introducing smaller home product.”
Orrock said he doesn’t have a timeline for when that will happen but cited how some of Summerlin’s earliest neighborhoods had housing measuring 1,200 to 1,800 square feet. It’s not only about affordability, he added.
“I think there are some folks that don’t want a 3,000-square-foot home,” Orrock said. “They are comfortable in a smaller home and t schools and maybe can’t afford the higher price.”
Summerlin has 2,500 apartments and Orrock said more will be built this year to meet the demand of people who want to live in Summerlin or no longer want to own. William Lyon Homes is constructing condos on West Charleston Boulevard that will be as small as 800-plus square feet, he said.
Dennis Smith, president of Home Builders Research, said that’s a smart strategy because the addition of Downtown Summerlin and other commercial development has generated more jobs. Those workers want to live there if they can afford it, and their employers want that. too. Those new residents would spend their money in Summerlin as well.
“They’re trying to find ways to make it realistic for someone to live and work out there,” Smith said. “They had parcels sitting unused for a number of years that were planned and zoned for multifamily housing. Now the market is ready for it. Maybe up to two years ago it wasn’t.”
That option for smaller and more affordable housing will be in contrast to what happens on most of the other, more valuable, land in Summerlin that’s situated in higher evaluations, some as high as 4,500 feet. Six of the neighborhoods to open in 2017 are in the Cliffs and one is in the Ridges.
“We’re out of the flat land, and now we’re going up a hill,” Orrock said. “The topography is going to be more dynamic than it was in the first part of Summerlin.”
More than 60 lots at the exclusive Summit Club, a 550-acre joint venture with Discovery Land Co., have been sold in 2016, with an average price of $3.2 million. The Tom Fazio-designed golf course is expected to be completed in February. The first of the multimillion-dollar homes could be completed by the end of 2017.
Smith said Summerlin remains the “elite of the master plans in Vegas” and doesn’t expect that to change. The prices will rise for the higher elevations and better views, and Smith said he doesn’t expect that demand to taper off, especially since the opening of Downtown Summerlin in 2014 has created more fans of the master plan.
“The more people that come out there, the more that will like that area and want to move there,” Smith said. “If you talked to 10 families in Summerlin, you would be hard-pressed to find someone who didn’t have good things to say about living there.”