High Las Vegas Land Prices Affect Other Segments of Economy

Las Vegas real estate has been thriving thanks to high land prices and high demand.

However, an article in In Business Las Vegas highlights the effects of high land prices on the industrial segment of the local economy:

During the first quarter of 2005, the industrial market remained strong, but brokers, developers and users of space continue to worry about the effect of land prices on the market sector.

Land prices continue to increase, causing some developers, particularly those building distribution space, to enter (or propose) joint ventures with property owners, Kevin Higgins, senior vice president of Voit Commercial Brokerage said.

"In order for certain developers to afford these new pricing levels, profit-sharing with land owners is the vehicle to continue developing real estate," he said.

Developers also are looking at projects that include more showroom and office space, rather than straight industrial warehouse, to justify land costs and rent, said Mike Lyons, senior vice president of NAI Horizon's industrial division.

Industry leaders caution that continued "down-zoning" of commercial land for residential use could negatively impact the job market in the area.