Loan Officers Looking Closely at Quality in Funding Las Vegas High Rise Condo Projects

Yesterday's article in the Las Vegas Review Journal talked about how the failures of the Las Vegas high rise condo market is causing lenders to grow cautious and how financing high rise condo projects isn't as easy as it once was. Well... maybe for the Club Renaissance projects of the world. But quality projects such as Sky, One, Streamline, Juhl, Turnberry, and the Residences to name a few all seem to be doing fine.

Everyone always talks about how there are 100 or so projects in the works and that the market can't absorb all those units and how not all of them will be built. Yada.. yada.. yada... We all know that. The simple truth is that it doesn't take a rocket scientist to go to the planning board and get approval for a high rise project. Most times, I think you just have to be breathing! But getting the project financed, sold, and completed is certainly a different story. And in this town, at this time, you MUST go with quality or you'll find yourself in Ivana land - which is not the place you want to be.

Here's an interesting (and insightful) quote taken from Manhattan Las Vegas developer Alex Edelstein:

"People who generalize about the Las Vegas market and see a glut of condos are not getting a good picture of what's going on... it's a bit misleading. Of the 3,087 units for sale, nearly 70 percent are priced under $250,000, which probably means they're apartment conversions. Another 16 percent are priced above $500,000, suggesting they're high-rise luxury units... That leaves only 460 condos in the entire valley in the sweet spot between $250,000 and $500,000"

Are you in that sweet spot yet? Because as Calmerica loan officer Bob Charles says,

"My thinking is that it will take slightly longer to sell out the projects that actually make it to completion, but I doubt there will be any losers in the bunch that does finish."