Construction volume in Las Vegas’ multifamily sector nearly doubled in 2016 — a sign of growth and an improved regional market, a recent report by Cushman and Wakefield’s commerce division shows.
In 2016, permits for nearly 11,000 multifamily units were approved in the Las Vegas Valley, as of Cushman and Wakefield’s June release. On average, 5,000 to 6,000 permits are issued per year.
The area with the heaviest amount of approvals was unincorporated Clark County along a 5-mile stretch of the 215 Beltway west of Las Vegas.
Many of the larger developments in that stretch exceed 300 units: Union apartments at 4450 S. Hualapai will bring 338 units to Las Vegas; Aspire, on Tropicana Avenue near the 215 Beltway, will bring 271 units; Calida Group’s Elysian West will have 466 units; SW apartments on South Durango Drive and West Sunset Road will have 310 units; and 2One5 apartments at 7960 San Rafael Way will bring 368 units.
“The amount of undeveloped land in this area has enticed developer interest,” said Carl Sims, executive director at Cushman and Wakefield/Commerce, Las Vegas division. “Situated between two high-revenue producing areas, Summerlin and Henderson, with easy access on 215, the area is well-suited for multifamily development.”
The Cushman &Wakefield report said lower-than-normal vacancy, along with rising rental rates, are driving the push. Rental rates in Las Vegas have grown, on average, been between 4 percent and 6 percent.
The report also said increases in land prices could slow the construction boom.
In the past few years, land prices have averaged between $10,000 and $15,000 per unit, the report said. Today, that number has climbed to $35,000 or more per unit.
Ground broken on elementary school projects
The Clark County School District broke ground on two elementary school projects in mid-June.
A new elementary school at Chartan Avenue and Pioneer Way in southwest Las Vegas is going up under the district’s most recent funding package — the 2015 capital improvement plan.
A nearly 55,000-square-foot elementary school building is set to be added to the West Prep Academy’s campus at Martin Luther King and Lake Mead Boulevards. That project, however, falls under an earlier round of funding from the late ’90s.
The Chartan Avenue and Pioneer Way project is the fourth elementary school to break ground in 2016 under the district’s $4.1 billion expansion and renovation plan. The first school to break ground in 2016 was in Henderson at Dave Wood Circle and Galleria Drive. Since then, two other projects have broken ground in Summerlin and North Las Vegas.
The Chartan Avenue project’s construction manager is Core Construction. Sletten Construction of Nevada Inc. is heading the West Prep Academy project.
Construction material prices
rise in May
The cost of construction increased in May; material prices rose for the third consecutive month, an analysis of the Bureau of Labor Statistics Producer Price Index by the national Associated Builders and Contractors shows.
Material prices in the nonresidential sector rose by 0.9 percent in May compared with April. The gain is mainly being pinned on iron and steel prices and steel mill product prices — with expansion rates for the month at 5.8 percent and 4.6 percent, respectively. Prices for softwood lumber rose 2.2 percent from April to May; natural gas rose 2.9 percent in the same period.
“After falling sharply during all of 2015 and into the early months of 2016, an increase in global commodities prices had to happen as markets firmed,” said Anirban Basu, Associated Builders and Contractors’ chief economist. “While much attention has been given to the recent rise in oil prices to around $50 per barrel, other commodity prices have also experienced a resurgence, including iron ore.”
NAIOP Southern Nevada bus tour
NAIOP Southern Nevada is preparing for its 2016 bus tour of local properties in the industrial, office, mixed-use and retail sectors. This year’s event is being dubbed “A Whole New Ballgame.”
The tour is planned for Oct. 6, with registration, exhibits and buffet starting at 11 a.m. at the Rio. The city tour starts at 1 p.m. Tickets run $75 for members and $95 for nonmembers on or before Sept. 30 at 5 p.m.; after that, it’s $95 and $125, respectively. Ticket includes buffet.
Contractors interested in submitting their properties for inclusion must be a NAIOP member for build-to-suit projects. Developers also must be members to submit spec development projects for consideration.
Property submittals deadline is June 30; the project must be recently completed or under construction as of September 2016.