http://brigodfrey.cbvegas.com/blog/archive_201407/sort_entrydatetime-desc/ IKEA’s Meatballs Are Coming to Town By: Michael Sadler Late 2015 early 2016 IKEA, world-renowned furniture retailer, will finally erect a store of its own in Las Vegas. This proposed IKEA store will be located on the Bruce Woodbury 215 Beltway near the Durango and Sunset exit. The closest one to Las Vegas is currently in West Covina, CA. The demand has been so great for an IKEA in Las Vegas, that there are companies that will go to California to pick up the furniture for you. In fact, IKEA was near the top of the list of a recent pole asking locals what they would like to see come to Las Vegas. SDSW, LLC, is the current owner of the land the IKEA store will sit on, and it will cost IKEA International $20 million to acquire the land from them. This IKEA store is also reported to employ about 300 full time and part time employees.  New Developments On the Strip For the most of us that are locals to Las Vegas, we hardly go on the strip frequently enough to really notice any changes unless you keep your eyes keenly peeled. I for one had no idea about the newly finished MGM owned Cromwell boutique hotel until I read about Giada De Laurentiis’ new establishment there – which I have heard nothing but good things about since it opened several weeks ago. On Labor Day of this year, the SLS is slated to open as well. The SLS Las Vegas is actually the former Sahara, but you couldn’t really tell that because the owners of the SLS have put in serious money to completely gut and remodel the entire property to where there is essentially no trace of the Sahara’s looks and Rat Pack history. SLS Las Vegas is jointly owned by private equity firm Stockbridge Capital Group and SBE Group. SBE Group owns other SLS properties in Miami and Los Angeles. The project is reported to cost about $415 million. Hearing about the openings of the Cromwell and SLS Las Vegas got me interested in thinking about the possibility of other developments that are currently in development/recently finished on the strip. Other than the Cromwell just being newly opened, the Linq adjacent to the Quad (the former Imperial Palace for home gamers), has also opened in the last few months. Obviously the Linq’s largest attraction is its observation wheel called the High Roller – wonder why it’s called that? Aside from that, the Linq also has shopping, fine dining restaurants, as well as Las Vegas’ very own Brooklyn Bowl. The Brooklyn Bowl is a New York-based company that puts a restaurant, concert venue, and bowling alley under one roof. Another project that is currently under development is the unnamed arena located behind the New York, New York Casino. This arena is slated to open summer of 2016 and is jointly owned by AEG and MGM. When completed, the stadium will have no permanent tenants tied to the stadium. Instead AEG-MGM hope to target award shoes, boxing, MMA, and concerts in the 20,000-seat arena. With that being said, the stadium will be built to accommodate a NHL or NBA team if they choose to relocate here to Las Vegas. The last project that is currently underway on the strip is Resorts World Las Vegas. Resorts World, a Malaysian-based gaming company bought the skeleton and land of Boyd Gaming’s Echelon Place in March of 2013. Resorts World is supposed to have 6,583 hotel rooms once completed in 2016 and will sport an Asian theme. Resorts World is located on the north end of the strip, near the Fashion Show Mall.3           1.      1. Source of cost and employment figures:http://www.lasvegassun.com/news/2014/jul/14/ikea-announcing-plans-open-las-vegas-area-store/2.  Source of cost figures:http://www.reviewjournal.com/business/sls-las-vegas-formerly-sahara-will-open-labor-day-weekend3. http://www.reviewjournal.com/business/aeg-mgm-arena-project-break-ground-may-1 http://brigodfrey.cbvegas.com/blog/839/ikea’s-meatballs-are-coming-to-town/ Tue, 22 Jul 2014 11:35:31 -0800 Class A multifamily continues to be one of the most favored asset classes both nationally and in Las Vegas. In some U.S cities, capitalization rates are as low as they have ever been, particularly in Tier 1 cities with asking cap rates in the 4% - 6% range.1  Clearly some investors believe that they can push rent growth further. One should be cautious of this approach since there is an incentive to add new supply, which has been constrained by recession era risk aversion by both developers and lenders. Nevertheless, large gaps exist between apparent demand and supply in several key areas in the Las Vegas Valley, noteably in Henderson and particularly in Downtown Las Vegas. We have also noted some high occupancies in Summerlin Class A projects. Well located buildings with North Las Vegas and the Northwest part of the City of Las Vegas are also fairing well. Additionally, while Valley Wide vacancy rates are higher than national rates (8.9% vs 4.1%), as we segment supply, Class A and B tend do better than Class C, with some of the Downtown buildings presenting some exceptions. An example of Class A/B occupancies, Camden Properties, a REIT, shares building level occupancies in it's Anuual Reports. This offers a pretty good sample of how well operated, mostly Class B buildings have recently been performing. All of these are higher than 90% with several above 95%.                                                                                                  Source: Camden Properties 2013 Annual Report.Deal volume in Las Vegas continues to be strong. We have examined seven Class A sales taking place year-to-date and a majority of these are trading above $110,000 per door with several at $130,000. Elsian Parc closed for nearly $160,000 per door. In terms of buyer motivation, spreads over tier 1 cities are strong enough to induce some interest in smaller metros like Las Vegas and many believe Las Vegas is on its path towards recovery. This position is understandible given some of the economic data we have observed and several others have commented on. We are seeing cap rates as low as amost 5% to just over 6% for high quality buildings. In land sales, our firm was recently involved in a well located land transaction that traded for nearly $350,000 per acre. We have seen some as high as $450,000 per acre, or about $30,000 per door on existing entitlements. Clearly there is some aggressiveness towards new development, however we haven't really been adding a lot of supply. Additionaly, tenants we have spoken with are really liking some of the amenity rich buildings that have been built in this generation, of which some more are either planned or under construction, like Elsian at the District or Gramercy in the Southwest. The Dune Portfolio which includes Juhl and The Ogden, One Las Vegas and Loft 5, originally built as Condos, also falls into this category. There also appears to be a growing pool of tenants with many Millenials entering the workforce and some are now stabilizing their lives following school.We continue to like this sector and we are anxious to participate in even more of these deals. SALES OF CLASS A (and some considered well located Class B) MULTIFAMILY - JAN - MAY 2014                                                Sales through May 2014.  1. Cassidy-Turner Summer 2013.  http://brigodfrey.cbvegas.com/blog/798/multifamily/ Wed, 16 Jul 2014 04:48:48 -0800