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Nov. 02, 2007
Copyright © Las Vegas Review-Journal

Little action at BLM auction: 31 parcels for bid; one sold

By HUBBLE SMITH
REVIEW-JOURNAL
BLM LAND SALE FACTS

Number of auctions since 1999 -- 22

Parcels offered (total acres) -- 553 (13,483)

Parcels sold (total acres) -- 493 (12,973)

Appraised value of parcels offered -- $1.96 billion

Appraised value of parcels sold -- $1.76 billion

Sale price of parcels sold -- $2.76 billion

Highest price per acre sold -- $2.04 million

Lowest price per acre sold -- $18,666

SOURCE: Bureau of Land Management

Only one of 31 parcels offered at Thursday's BLM auction was sold, an indication that Las Vegas land prices are still going through a downward correction, some observers said.

The Bureau of Land Management sold a 15-acre parcel at Welpman Avenue and Pollack Drive in Henderson for the minimum bid of $7.8 million, or $520,000 an acre. The land was bought by a San Francisco family with real estate holdings in Las Vegas.

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    • "I told you it wouldn't take long," auctioneer Mike McKee said after seven or eight parcels received no bids. The auction, held at Clark County Government Center, was over in about 45 minutes.

    The appraised value for the total 168 acres for sale was $72 million, or $429,850 an acre.

    Anna Wharton, supervisory realty specialist for the BLM, said the federal agency contracted with an appraiser in Las Vegas who sets the fair market value of the land based on comparable sales of similar-size properties in the area.

    The parcels are nominated for auction by the city or county government in which the land is located, usually based on someone's expressed interest in buying the land, she said.

    "People who were interested, whether they're still interested today, who knows," Wharton said. "The market does play a big role at the sale. We're just going to have to wait and see what happens. The market is still correcting."

    The BLM's appraised values were simply too high, said Ofra Gelman, director of commercial studios for SH Architecture in Las Vegas. Many of the properties had encumbrances such as underground telephone and power lines and road easements, she said.

    "It's no big deal on a 15-acre parcel. You can always put parking on top of an easement and still have room for building," Gelman said. "If you have all those required easements on five acres, you have hardly anything left over to build on."

    Nevada State Bank real estate loan officer Andy Chaudhuri was going to use the BLM land sale to justify why he should continue making land acquisition loans.

    "Hearing that one (parcel) sold is not good news for me," he said.

    The average price for an acre of land in the Las Vegas Valley was $677,000 in the third quarter, Jeremy Aguero of Applied Analysis reported. He's seen a sharp decline in the volume of land transactions.

    The BLM auction bust is an "outcropping" of previously expressed concerns that land prices are making most projects cost prohibitive, he said.

    "If I'm paying $600,000 or $700,000 an acre, there's a limited number of uses I can put on that at current rents," Aguero said. "You're not seeing enough rent growth in office, apartments, industrial and to a lesser extent, retail, to make it work."

    Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.

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    just moved here wrote on November 02, 2007 09:18 PM: just moved to Las Vegas and love it - best move I ever made!


    hilarious's crack dealer wrote on November 02, 2007 08:38 PM: aw don't be mad 'cause I cut you off. You know nothing about Las Vegas.


    j wrote on November 02, 2007 08:25 PM: Ken, give me a call. This native and 41 year resident would be happy to PAY you to leave TODAY.


    ken wrote on November 02, 2007 05:49 PM: most long time Nevadans are leaving as soon as they retire. There is no quality of life left. The good ol boys have finally managed to run things into the ground. Well whats left of the developers can stay here with the criminal element and their illegal workers. Soon even the tourist will find other destinations. From our corrupt politicians and judges to our ineffective law enforcement this state is falling fast. I have lived here 51 years and hope to be out of here by next year and good riddance.


    cas127 wrote on November 02, 2007 03:34 PM: Where are all the hysterical "We're running out of land/Unaffordable housing/We must pay extra housing goodies to public employees so they can afford to live here (and rip us off)" stories of a few years back?

    Golly - you mean all the "experts" of late were full of it and/or manipulating us to pump up a housing bubble?


    Hilarious wrote on November 02, 2007 02:03 PM: The boom that once was Vegas is now merely a crackle.

    All the excitement, energy of people flocking to the area is gone.

    Now filled with ex-convicts, people hiding out from the law, child molesters (i.e. Arthur Stiles), gambling addicts, alcoholics and strippers.

    What a terrific place to move to!


    douglas wrote on November 02, 2007 01:23 PM: one should notice that a true, legitimate auction might need larger exposure than local news ads.

    a tv news article pointed out the latest ebay auction... some "town" in texas with 4 inhabitants. it was stated that the auction so far was at 5 million.

    perhaps a wider exposure is needed than the usual suspect, local developers. as we will see larger businesses and properties bought by international interests, so it might be for las vegas land.


    Mark's Mom wrote on November 02, 2007 10:15 AM: Despite my efforts, Mark was the kid who sat in the back of the class not listening, and then beat up the kids who got "A" report cards.


    Lee wrote on November 02, 2007 10:06 AM: "Real estate will be at least 50%, and I think 80% lower"

    It is a good thing no one is paying for you to think.

    You are not going to see a 50% to 80% drop in the prices of homes or land in this valley.

    This auction was advertised on all the Major T.V. Stations, on radio and in the news paper along with every developer in the Valley knowing about it. No one is going to buy something they can not sell and make a profit at in todays market. The market will return in one to two years but not at the stupid high prices we had before.


    BH wrote on November 02, 2007 09:24 AM: All of the developers knew about the auction. Why buy more of what you are losing money on?

    "Hopefully it will wipe out the welfare state and the middle class who support it."

    That is a novel idea wipe out the middle class. Make everyone either filthy rich or dirt poor. It is beyond me how wiping out the middle class would get rid of the welfare state. Seems to me like it would grow welfare.


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