High Rise Building in Las Vegas  

 

 

Designs to reach for sky, panelists say

Local executives say they see building growing up, not out

Building materials, skilled labor and land availability are the main issues facing developers in Las Vegas, a panel of general contractors and architects believes.

One of the growing trends is construction of high-density, high-rise projects that make the best use of every square foot of land.

"Las Vegas is going vertical," Ray Newmiller, vice president of business development for Martin-Harris Construction, said at a forum sponsored by the Southern Nevada chapter of National Association of Industrial and Office Properties.

Projects work financially, or "pencil out," for people who are building on property that was purchased three years ago, Newmiller said Thursday at the Stardust, but it's a different story for future development based on today's land prices.

"If developers can't get the rental rates that are required to make it pencil, you're going to see a slowdown," said Gary Congdon, an architect with Lee & Sakahara. "I've got projects in my office suspended because they can't get the rents. It's all about land and the cost of land. That's what it comes down to."

Ted Giza, marketing director for Jaynes Corp., said he's seeing "unqualified competitors" come from out of state and "bomb" a project with a bid that's sure to lose money just to get their foot in the door.

Another problem, he said, is finding and retaining qualified employees.

"You'd think the labor market would be superior to other places with our population growth," Giza said. "That is not the case."

Newmiller said costs for materials such as concrete and copper are "mind-boggling," continuing to increase at 1 percent to 3 percent a month, and that poses a problem for everyone at the forum.

"We don't have any consistent numbers anymore," he said. "Our clients want us to give them that number they can take to the bank and there's no way to give them that number. You can't guarantee it."

Also, general contractors are still on a "learning curve" to comply with the new International Building Code.

"Between all of that, they throw in insurance, which is 15 to 20 percent over what it was. Our deductible has gone from $250,000 to $500,000," Newmiller said.

Tom Schoeman, president of JMA Architecture, said the most drastic change he's seen in the Las Vegas economy and development picture is the onslaught of high-rise residential projects. About 10,000 condominium units are on the drawing board and the demand is there for another 25,000.

"They're selling faster than they can put them on the market," Schoeman said. "Anybody will tell you that."

Ninety percent of the projects in JMA's office are high-rise, he said.

"With aging baby boomers and rising land prices, that's the natural evolution of Las Vegas that will change the skyline," he said.

Look for more high-rise buildings to up along the valley's freeways, said Howard Thompson, principal of Howard F. Thompson Architect.

"A couple of years ago, two stories on the freeway was the norm. Anything over two stories was a gamble, unless you had a major tenant," he said. "Now, three, four, five stories are the norm. It's now hard to pencil out two-story buildings. They don't work."

Single, stand-alone buildings will give way to multiple buildings, at least two or more, Thompson said.

"The synergy you create with multiple buildings, you can't do that with a single building," he said.

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This article was written by Hubble Smith and appeared in the Las Vegas Review Journal on July 20, 2004