12 Acres Near Las Vegas Strip Could Be Flipped or Developed by New Buyer
Posted on: November 15, 2020, 09:05h.
Last updated on: November 15, 2020, 10:08h.
Speculation continues over what may be built on a recently-acquired 12.1-acre property near the Las Vegas Strip. The vacant parcel is also close to the planned 1,500-room Virgin Hotels Las Vegas, scheduled to open in January.
Located a mile east of Las Vegas Boulevard, the 12.1-acre parcel fronts on Paradise Road, and was acquired by a Henderson, Nevada developer, Ochoa Development Corporation, for $12.5 million, from China-based owners, the Las Vegas Review-Journal reported last week.
The property is next to the now-vacant Atrium hotel. That structure is to be demolished and a 480-unit apartment building is to be erected on the site by Siegel Suites.
But no word on what may be built on the 12.1-acre site. Lou Ochoa, a representative for the buyer, said they plan a “really cool project,” the Review-Journal reported.
He declined to provide details. All he revealed is that construction could kick off within a year, but then clarified to the Review-Journal that could be two or three years from now.
When asked about the purchase, Stephen Miller, director of UNLV’s Center for Business and Economic Research, where he also teaches economics, noted the possibility of the developer selling off the 12.1-acre property in two to three years at a profit.
The short-run play is to resell the land in a couple of years at a much higher price,” Miller speculated to Casino.org. “The long-run play is to build something on the land. Mixed-use is the likely move.”
“But, I would place my initial bet on the short-run strategy of flipping the land for a profit,” Miller added.
Uses Could Include Gambling, Entertainment, Shopping
The Rev. Richard McGowan, a finance professor at Boston College who follows national gambling trends, is “sure that Ochoa is viewing this land purchase in view of the long run…. It certainly is a good time to buy assets with an eye on a future recovery.”
12.1 acres will allow them to allow patrons to gamble, be entertained, and, of course, to shop,” McGowan told Casino.org. “That is what patrons want from The Strip, and so Ochoa is trying to provide that off The Strip.”
He adds that the property has to have mixed-use “if it is going to be profitable in the long run.”
Many larger casinos on The Strip or in downtown Las Vegas are situated on larger parcels. But Planet Hollywood is located on 11.8 acres, according to Las Vegas Advisors, an online site. That is marginally smaller than the recently acquired 12.1-acre lot.
Seller Kept Lowering Asking Price
Previously, the asking price for the 12.1-acre property was much higher. In 2017, the owner was seeking about $42.3 million. More recently, the owner was asking $25 million, the Review-Journal reported, based on online real estate marketing sites.
When asked about the actual sales price, listing agent Mark Anthony Rua of ERA Brokers Consolidated told the Review-Journal, “That was the best price they could get with a buyer that would close this year.”
In contrast, a close to 60-acre property, located nearby, sold in 2019 for $130 million, the Review-Journal said. The purchaser was the Daneshgar family, owners of Southern California real estate firm 3D Investments, the report adds.
Since March, the Las Vegas commercial land market was impacted from the coronavirus-linked economic downturn. “The pandemic … put the national and Southern Nevada economies into free fall in March and especially April of this year,” Miller said.
This included land values, which plummeted,” Miller added. “This property had been on the market for $42.3 million, and then $25 million in recent years.”
“If the coronavirus vaccines come on board as now anticipated, and therapeutics also come into wide-spread use, the economy can return to a more normal situation by 2022.”