The Las Vegas housing market has claimed two of the top five spots on a national list ranking sales among master-planned communities.
Mountain’s Edge, a Focus Property Group development in southwest Las Vegas, was the second-best selling community in America in 2006, with 1,732 sales, a report from Maryland real estate consultant RCLCO shows.
Central Florida’s Poinciana community, an Avatar Properties project that sold 2,563 homes in 2006, was the only American master plan that surpassed Mountain’s Edge in sales.
The Howard Hughes Corp.’s Summerlin, on the western edge of Las Vegas, came in at No. 5 with 617 sales.
Steve Bottfeld, a real estate analyst with Marketing Solutions in Las Vegas, said he’s not surprised both communities received a national nod for brisk sales.
"Summerlin has had outstanding management and great leadership all the way back to (former Hughes Corp. executive) Mark Fine in the 1980s through (former Hughes Corp. President) Dan Van Epp in the 1990s," Bottfeld said. "And Mountain’s Edge is directly in the path of development brought to the southwest by Interstate 215."
A third developer on the RCLCO list has a Las Vegas connection.
Newland Communities is the company that officials of the city of Las Vegas chose to coordinate the planning and build-out of 61 acres of downtown property. Newland is calling for 3,600 residential units, in addition to 2.3 million square feet of office space, 420,000 square feet of retail space and 1,750 hotel rooms on the Union Park site. Van Epp is president of Newland’s Mountain division and manager of the Las Vegas project.
Two of Newland’s Texas developments made the top 10.
Aliante in North Las Vegas and Anthem in Henderson, which ranked No. 4 and No. 5 respectively on the 2005 list, fell out of the top 10 in 2006.
Mountain’s Edge and Summerlin improved their positions despite slower sales. Sales at Mountain’s Edge fell 22 percent, from 2,213 closings in 2005 to 1,732 closings in 2006, RCLCO’s report said. Yet, Mountain’s Edge moved up a spot, from No. 3 to No. 2.
At Summerlin, sales dropped 35 percent, from 954 units in 2005 to 617 units in 2006. The master plan still managed to jump from No. 9 to No. 5.
That’s because many communities nationwide suffered similar declines. Highlands Ranch in Denver shed 35 percent in sales from 2005 to 2006, while sales at Johnson Ranch in Phoenix were off 43 percent from 2005 to 2006. Vistancia, another Phoenix master plan, saw its sales decline 33 percent from 2005 to 2006.
John Ritter, chairman and chief executive officer of Focus Property Group, said the RCLCO rankings help Focus officials assess how their sales compare to other major master plans across the United States.
"Although we’ve been the fastest-selling community in Nevada for a couple of years, it’s always nice to see how you’re doing nationally," Ritter said. "It’s good for us to have a yardstick to measure ourselves against, not only here in town but in the state and the nation."
Sales at Mountain’s Edge in early 2007 appear roughly even with sales in early 2006, Ritter said, so the community could hang on to its top-five slot on RCLCO’s next ranking. Passing No. 1 Poinciana will be difficult, Ritter said, because the master plan has a separate, active-adult component in addition to its multigenerational segment.
The 3,500-acre Mountain’s Edge will have 14,000 homes upon its completion in five to seven years. It’s sold about 4,000 homes, Ritter said.
Focus is rolling out other local master plans, including the 7,500-home Providence in northwest Las Vegas, and Inspirada, an 11,000-home community in Henderson. As sales intensify at both master plans in the next two years to three years, Ritter said, it’s "very possible" that Focus could have three of the country’s best-sellers.
Given its build-out date of 2020, Summerlin is also likely to remain among the nation’s biggest sellers in coming years, though the master plan’s number of closings is smaller today than the number of units it sold in its earlier days.
With the exception of 1996, Summerlin was the nation’s No. 1 seller from 1992 to 2002, sometimes moving more than 3,000 units a year. The community dropped to No. 2 in 2003 and tumbled to No. 9 in 2005.
Summerlin’s slackened sales are the result of an evolving business plan, the community’s developers say.
"In the early stages of a master plan, trying to capture market share is important," said Kevin Orrock, top division executive of The Howard Hughes Corp. "But a master plan tries to create value over time, and you don’t do that by putting a lot of inventory in the hands of builders. We meter land out, so we hit our price points. We have a good mix of product and good price points, but we don’t have an overabundance of inventory sitting in the hands of builders."
Bottfeld added that officials at The Howard Hughes Corp. and its parent company, General Growth Properties, are also busy preparing for development within the 400-acre heart of the 1,300-acre Summerlin Centre village. The site, which is designed to serve as a town center for Summerlin, already houses Red Rock Resort; office towers, a major shopping center with four department stores and thousands of residential units are also on the drawing board.
"Summerlin Centre requires a great deal of time to plan, and (The Howard Hughes Corp.) will place infrastructure for the community first (before home sales begin)," Bottfeld said. "Once that infrastructure goes in, Summerlin will jump back up. Watch out."
Summerlin could also see sales increase once its Altura village opens for business. Altura, a 2,000-acre village planned for where I-215 and the Summerlin Parkway meet, will have 14,000 homes. About two-thirds of Summerlin’s 22,500 acres are built out, and the community’s population of 95,000 is less than half of the 220,000 residents who will live there when it’s complete.
"It’s very possible we’ll move up on the list, but it’s not our goal to be No. 1," Orrock said. "We’ll be in business for the next two decades, so our time horizon is significantly longer than other master plans in the valley. We’re creating a community and a lifestyle, and we’re creating long-term value for our shareholders. That’s a long process. It’s not something you do overnight."
Bottfeld said planned growth along the Strip and the Las Vegas economy’s increasing diversification should boost growth prospects for master plans in Southern Nevada, including the 43,000-acre Coyote Springs about 45 minutes north of Las Vegas and communities planned in Mesquite.
Two Southern Nevada master plans have become familiar inhabitants of a national list ranking master plans by sales.
|Rank||Community||Developer||Homes Sold 2006||Market||2005 Rank|
|1.||Poinciana||Avatar Properties||2,563||Central Florida||No. 2|
|2.||Mountain’s Edge||Focus Property Group||1,732||Las Vegas||No. 3|
|3.||The Woodlands||The Woodlands Operating Co.||1,409||Houston||No. 6|
|4.||Cinco Ranch||Newland Communities||943||Houston||No. 18|
|5.||Summerlin||The Howard Hughes Corp.||617||Las Vegas||No. 9|
|6.||Johnson Ranch||Sunbelt Holdings||608||Phoenix||No. 8|
|7.||Highlands Ranch||Shea Homes||589||Denver||No. 10|
|8.||Vistancia||Shea Homes/Sunbelt Holdings||572||Phoenix||No. 13|
|9.||Power Ranch||Sunbelt Holdings||553||Phoenix||No. 24|
|10.||Eagle Springs||Newland Communities||509||Houston||No rank|