Las Vegas continues to host a wealth of new development projects, fueled by a stable economy, a constant influx of new residents, a population of 1.3 million and an average of 35 million tourists per year. Significant expansions in the commercial and gaming sectors of the economy indicate that Las Vegas proved to be less susceptible to the recent national economic slowdown than other major U.S. cities. From January to May of 2003, the Las Vegas Valley’s planning commissions approved 300 acres of new development and an additional 160 acres of projects are in the proposal stage. Such activity indicates strong future growth in all sectors.

In a recent Milken Institute study, Las Vegas ranked Number 2 in a national poll of cities based on job and wage performance and technology output. This is due to steady growth in the retail and mainstream industries and economic diversification beyond the gaming industry.

Resort and Timeshare Projects

Las Vegas is home to 20 of the world’s 23 largest hotels. In the past decade, more than $12 billion in renovations and new projects have come to The Strip. The hotel and gaming industry in Las Vegas is responsible for more than 12 percent of Clark County’s employment. The newest mega-resort to emerge on The Strip is Wynn Las Vegas. A $2.4 billion Steve Wynn project, the 2,700-room resort is slated to open in 2005 and will showcase 18 restaurants as well as an 18-hole golf course. The Westin Casuarina hotel recently opened on the site of the former Maxim Hotel. The $75 million redevelopment project brings the first Westin resort to Nevada. Current construction projects on The Strip include Mandalay Bay’s new tower and 1.5 million-square-foot convention center, the Venetian Hotel’s 150,000-square-foot expansion, a 60,000-square-foot addition at Bellagio, Hilton’s timeshare project at Sahara (1,500 units at buildout) and a Cancun Resort timeshare on the south end of Las Vegas Boulevard. Off The Strip, new hotel projects include the Ritz-Carlton at Lake Las Vegas, Blue Moon Resort and The Cannery Hotel and Casino in North Las Vegas. New timeshare projects include Fairfield Grand Desert Resort, The Tahiti Timeshare and Resort Magic timeshare.

Retail

Retail development is fueled by fast-growing residential development in peripheral areas of Las Vegas as well as tourism on The Strip. The Rouse Company’s Summerlin Town Center — a proposed 1,300-acre shopping mall with anchor tenants Lord & Taylor, Dillard’s, Macy’s and Robinsons-May — is set to open in 2006 on the west side of town. Other developments in the area include Grand Canyon Parkway Center, a 1.5 million-square-foot project anchored by Target, Mervyn’s and Sears, and the 650,000-square-foot Tropicana Beltway Center. In the northwest, Centennial Center will add six restaurant sites as a second phase to the 90-acre development, which is already anchored by Wal-Mart, Sam’s Club and The Home Depot. An adjacent project, Centennial Gateway, is planned with 350,000 square feet of additional retail space. At Interstate 215 and Elkhorn, Montecito Crossing is under construction with Kohl’s and Sports Authority as confirmed anchors.

El Centro de Las Vegas, a commercial center targeted toward the Latino population near downtown, broke ground with a $28 million price tag. Around 150,000 square feet of fashionable commercial space is planned for the property with the hope of upgrading this area of town. Chelsea Property Group and Simon Property Group recently opened Las Vegas Premium Outlets, a 450,000-square-foot project with 120 outlet stores, creating more than 800 full- and part-time jobs in the downtown area.

Located in the southeast portion of the Las Vegas metro area, the city of Henderson — sometimes classified as Green Valley — has exhibited the fastest growth rate of any city in the United States. One of the largest and most visible developments under construction in this area is The Shops at Green Valley Ranch, a 400,000-square-foot development designed to have a New England Main Street feel. Developed by American Nevada Company, this revolutionary development will consist of upscale stores, restaurants, offices and 88 apartments located above the stores. The project is adjacent to Green Valley Ranch Station Casino at Green Valley and I-215.

Major retailers entering the Las Vegas market within the next 18 months include:

• Wal-Mart — has plans to build four new neighborhood grocery stores in 2004.

• Kohl’s — is introducing three new stores located at Peccole Plaza in Summerlin, Valle Verde & I-215 in Green Valley and Montecito Crossing.

• HomeGoods — will join Kohl’s at Peccole Plaza.

• Tweeter — plans to enter the market in 2005.

Retail development projects on The Las Vegas Strip include a current renovation of The Rouse Company’s Fashion Show Mall, an almost $1 billion effort that will add upscale stores such as Nordstrom, Neiman Marcus, Saks Fifth Avenue and Bloomingdale’s Home Store, along with four other major department store tenants. The Forum Shops at Caesars is increasing its space by more than 40 percent with a three-story, 175,000-square-foot expansion scheduled to open in November 2004. In addition, Mandalay Bay is adding 33 retail shops and restaurants, creating the largest retail development on the south end of The Strip. The development is scheduled to open this fall.

Office

Luttrell and Associates is developing Anthem Hills Professional Plaza at Eastern and Anthem Parkway that will house medical, financial and legal tenants. The property is located just north of the 14,000-home Anthem master-planned community and will cater to residents and professionals of that development. Longford Medical Center in Summerlin, developed by Longford Medical Group, is set to open its five-story, 135,000-square-foot structure in June 2004. The development will be the first in Las Vegas to allow medical users to buy or rent their space. Another medical office developer, Tennessee-based MedCap Companies, is building the 100,000-square-foot Southern Hills Medical Project, due to be completed in February 2004. The property is located directly adjacent to the new Southern Hills Hospital located at I-215 and Sunset Road. Centra Properties has announced plans to construct a 21-acre master-planned office park in the same neighborhood: Centra Point, at Sunset and Durango, will have six buildings ranging from two to three stories and 41,000 to 60,000 square feet. The park will be valued at $60 million and will create 300,000 square feet of Class A office space.

The Thomas & Mack Company is starting construction on two office buildings at Las Vegas Tech Center, a $4.8 million undertaking that will total 58,800 square feet, half of which will be flex use and may be occupied by industrial or office users. Medical office projects at the center include Triad’s $15 million Mountain View Professional Park in the “Medical Mile” portion of the center between Tenaya and U.S. 95.

Other recent office park completions include 98,200 square feet at Crossing Business Center at Summerlin Parkway and Town Center; Marnell Corporate Center Phase I, a 49,000-square-foot property located near Las Vegas Boulevard and I-215; and Green Valley Corporate Center and Green Valley Corporate Center South, with 68,300 and 54,200 square feet, respectively.

Industrial

Presently, North Las Vegas houses 20 percent of the Valley’s industrial space, and development continues to grow disproportionately in that part of town. Trammell Crow Company, one of the nation’s largest development companies, recently started construction on the 420,000-square-foot Cheyenne Distribution Center at Cheyenne and Lamb. Recently completed projects in the area include Golden Triangle Industrial Park and Golden Triangle #1, which total nearly 500,000 square feet of space. Centra Properties’ Craig Distribution Center will be completed later in 2003 with 213,000 square feet of distribution and showroom space at Craig Road and Flossmoor. The project will consist of three buildings on 14 acres.

North Las Vegas’ Cheyenne Technology Corridor, a major development project for the city of North Las Vegas, offers space for users with research, administration and manufacturing needs. The city forecasts the creation of 10,000 new jobs and the development of 4 million square feet in the next 5 years along this 5-mile stretch of Cheyenne Avenue. The project is a joint venture between Jackson-Shaw, Brennan Brothers, Harsh Investment Properties, RDS/Insight LLC, Stoltz Management and the city of North Las Vegas.

In Henderson, construction on the $4.2 million Phase I of the City’s Auto Show Drive/Interstate 515 interchange began in January and will consist of a southbound off-ramp connection to Auto Show Drive, providing access to the Valley Automall. The project will improve access to existing industrial and commercial areas east and west of I-515.

Ron McMenemy is president and co-owner of NAI Horizon Commercial Real Estate Services in Las Vegas.

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