Nevada’s top builders and developers are shaping the state, from new homes to office complexes to lavish casino/hotels. While growth-related issues and a lackluster economy are impacting new development in virtually every area of the state, some of them are only cautiously optimistic about the future, while others remain enthusiastic about Nevada’s prospects.
“The LandWell Company continues to be bullish on the future prosperity of Southern Nevada,” said Dan H. Stewart, president and CEO of The LandWell Company. “Thanks to major projects like Le Reve, the expansion of the Fashion Show and the Forum Shops, as well as new master-planned communities, the Las Vegas Valley should continue to grow. But as our local economy continues to diversify, commercial developers must respond to the changing market with product that is more heavily amenitized. For example, LandWell’s industrial parks now include landscaped trails, sitting areas, aesthetic street lighting and other details that enhance and create more appealing work environments.”
For more than a decade, the Henderson-based company has taken a leading role in developing a variety of commercial, industrial, retail and residential communities. Its current projects include Traverse Point and Black Mountain Industrial Center. Traverse Point, a live/work community located between Stephanie Street and U.S. 95 in Henderson, includes 100 acres of commercial, retail and office space, 100 acres of light industrial space and 50 acres of residential space. Black Mountain Industrial Center includes nearly 1 million square feet of developed commercial facilities, with another 1.5 million under construction or planning.
In Northern Nevada, Par Tolles, area director for Trammel Crow Company, one of the largest diversified commercial real estate companies in the nation, rates Nevada’s overall commercial real estate outlook as “status quo.” He said a “wait-and-see” attitude prevails.
“Developers have been judicious with their speculative developments, while waiting for vacancy rates to reach a level that warrants additional development,” said Tolles. “When the economy starts turning around, development will meet the demand. Fortunately, Reno-Sparks has never been tied to the tech market and therefore did not experience the extreme highs and lows faced by many other western cities.”
Tolles anticipates that companies will continue to be attracted to the core fundamentals of Reno-Sparks and that the industrial sector of the commercial real estate market will remain healthy. Trammell Crow Reno provides services and solutions for virtually all real estate needs in the area, including: office, retail, industrial and investment brokerage; property management; and in-house design and construction services.
The company’s current projects include Sierra Corporate Center, an office campus in south Reno that includes tenants such as Stantec and Microsoft; and Cheyenne Distribution Center, one of the largest speculative industrial projects ever built in Las Vegas, with two buildings totaling 612,000 square feet.
Nevada roots run deep in McCarthy Building Companies, a 139-year-old, privately-owned construction firm and the 44th largest construction company in the United States. The company provides a range of construction-related services under construction management, general contract and design/build contractual agreements, serving clients from full-service regional offices in Phoenix, Newport Beach, San Francisco, Sacramento, Dallas and Las Vegas.
McCarthy Building Companies has provided construction management services on more than 500 hospital projects in 42 states, including current projects at Spring Valley Hospital in Las Vegas, Spring Valley Hospital Neonatal Intensive Care Unit and the Spring Valley Hospital medical office building. Other new projects include Cox Communications’ payment and customer-care center and the shops at Green Valley Ranch.
“The developers on and off the Strip seem to be cautious but optimistic,” said John W. Frye, vice president/project director. “Casino properties this year have allocated the normal amount of tenant improvement and renovation projects; plans for Le Reve, Bellagio and Caesars Palace projects are firm, and other development will follow later. Healthcare will continue to be strong for the next two years, but office and retail will probably be softer. A lot of developers are planning condominium projects now, but everyone seems to be in a wait-and-see mode.”
Samuel E. Nicholson, vice president of preconstruction services at Perini Building Company, said investors are also taking a cautious approach to new development. However, Perini is still moving forward. “Our preconstruction group has been involved in planning and pricing of several large projects in Nevada that are anticipated to start within the next 12 to 18 months,” said Nicholson.
Some of the company’s recent projects include the 200,000-square-foot Colosseum Showroom at Caesars Palace, which can be adapted to serve as a venue for a variety of entertainment options, ranging from musical productions to professional boxing. The upscale, Tuscan-themed Ritz Carlton at Lake Las Vegas features 350 rooms and a three-story Old World-style bridge.
In both the northern and southern parts of the state, Granite Construction Company is making its mark. One of the largest heavy civil contractors in the United States, the company has provided construction services to Nevada for more than 22 years and it also owns and operates aggregate, asphalt and ready-mix plants. From offices in Sparks, Las Vegas and Carson City, it handles projects ranging from paving driveways to major highway jobs.
“Although our state is facing major budget issues and our nation’s economy has been sluggish, I am optimistic that we will continue to see responsible and positive growth in our state,” said Rod Cooper, branch manager of Granite Construction Company’s Nevada operations. “Nevada is a great place to live and do business, and as a consequence, residential, commercial and industrial construction should continue to thrive. I don’t suppose construction activity will keep pace with recent years, but in comparison to national trends, we should flourish.”
In Southern Nevada, Granite is currently engaged in site development work on three natural gas-fired power plant projects and some Nevada Department of Transportation bridge projects. In the north, the company is involved in the Reno Transportation Rail Access Corridor “ReTrac” project, which includes the lowering of existing railroad tracks by excavating a trench through the central business district in Reno.
A slow economy also hasn’t deterred Plise Development & Construction (PDC), a full-service commercial development, investment and property management company. PDC specializes in professional and medical office parks, light industrial parks and retail centers. According to William W. Plise, CEO, the company is involved in a variety of development and construction projects, including Siena Office Park’s Building Five, featuring more than 53,000 square feet of Class A medical and professional space. Buildings Three and Four (102,000 square feet) have recently been completed.
PDC is also focused on construction of Rainbow Sunset Park, located at Rainbow Boulevard and Sunset Drive, and Sage Mountain Commerce Center, located in Henderson. Rainbow Sunset Park will feature 300,000 square feet of office space and 100,000 square feet of retail. Sage Mountain’s 135 acres and 20 buildings will include office, light industrial and warehouse space.
On the retail end of the spectrum, Territory, Inc. is a recognized leader, having developed nearly 3 million square feet of retail product in Las Vegas. Territory, Inc. is a full-service commercial real estate developer and brokerage specializing in the development, leasing and management of large format retail shopping centers.
One of the company’s most recognized current projects is Centennial Center, a 900,000-square-foot retail shopping center located at the interchange of U.S. 95 and the Beltway in Las Vegas’ Centennial Hills area. The center is anchored by Wal-Mart Supercenter, Sam’s Club, The Home Depot, Circuit City, Ross Dress for Less, Office Max, Michael’s, Petco and Party City.
Even though she believes Las Vegas has been in a “bubble” so far, Terri Sturm, president of Territory, Inc., said as the national economy tightens further, the area will experience a slowdown in new retail construction.
“We are seeing more caution on the part of both retailers and lenders, particularly as our rental rates continue to increase to compensate for the rising costs of development, which can primarily be attributed to the skyrocketing cost of land,” said Sturm. “I would expect to see fewer new projects, particularly those that are not well anchored or pre-leased. I see traditional strip center development starting to give way to newer ideas, which consolidate multiple uses (retailers, restaurants, entertainment and offices) into larger ‘retail districts,’ although our current methods of zoning and land use don’t always encourage this type of development.”
In the new home market, U.S. Home has taken an active role in building Southern Nevada. The homebuilder and developer is part of the Lennar Family of builders – the largest builder in the nation, based on market capitalization. Current U.S. Home communities include: Aberdeen at Southern Highlands; Copperfield, Steeplechase, Palomino Canyon and Palazzo Monte in Seven Hills; and the newly opened Spanish Springs.
Mike DeSilva, division president of U.S. Home, predicts new home prices will continue to rise in the short term as a result of the dwindling supply of buildable land and increased competition for that land. As a result, he said the two most pressing challenges to the Southern Nevada real estate market will be to reverse decreasing affordability and to find a solution to the defect litigation/insurance crises facing builders in the state. Even with those challenges ahead, DeSilva is still optimistic.
“I am bullish on the Las Vegas real estate market,” he said “There are still over 7,000 people moving to Las Vegas each month. We are still right at the top of the country in job growth.”
He added that the market has remained strong, with demand for 22,000 to 23,000 homes for the past several years, despite terrorism, fear of war and economic uncertainties on the national front.
“I try not to get caught up in all the doomsday talk about the sky falling, as there is nowhere else in the country that has experienced this kind of development,” said DeSilva. “In the time it takes to read a magazine article, a couple dozen new residents will arrive in our exciting city.”
Another homebuilder ready to meet the needs of those new residents is Pulte Homes. The company, which acquired Del Webb Corporation in 2001, is the largest homebuilder in the United States.
According to Steve Petruska, the company’s area president for Nevada and Arizona operations, Pulte is currently offering 11 new communities in Southern Nevada, including two of its most anticipated: Silverstone Ranch and Anthem Highlands. Silverstone Ranch is a golf course lifestyle community with an abundance of course home sites in northwest Las Vegas. Anthem Highlands, which marks Pulte Homes’ re-entry into the southern part of the Valley, is a Scottish highlands-themed community featuring 1,500 home sites in five communities.
Regardless of the challenges, the nine builders and developers featured here will be the companies to watch in the years ahead.
