Hughes Corp. pleased with sealed-bid sales in Summerlin

Jennifer Shubinski

Friday, March 12, 2004 | 11:07 a.m.

The Howard Hughes Corp. is selling lots in an exclusive Summerlin community by sealed bids, rather than first-come, first-serve or the traditional lottery used by many builders and developers.

Ten lots in Redhawk, a custom-home neighborhood in The Ridges, which features Jack Nicklaus' Bear's Best Las Vegas golf course, have been sold via a sealed-bid auction to future homeowners, a first for the Summerlin master-planned community.

Howard Hughes officials said in the past, custom home communities have received "a trickle" of interest, and they were able to sell lots on a first-come basis. Recently, interest for lots in the Redhawk neighborhood generated an interest list with 2,400 names for 10 lots.

"We decided with such strong interest, the only fair way (to sell the lots) was by sealed bid auction," said Tom Warden, spokesman for Howard Hughes, an affiliate of The Rouse Co. "It's a good way at arriving at the market value for the land."

The 10 lots range in size from 15,400 square feet to 25,600 square feet. Minimum bids ranged from $375,000 to $720,000. Hughes didn't disclose the winning bid amounts but said they exceeded the minimums.

Analysts said selling lots to future homeowners through a sealed bid auction is unusual for the Las Vegas area, while selling large tracts of land through sealed bids to builders is not all that uncommon in successful planned communities. Most said it is simply a way for the developer to maximize its profit in what some have said is an overheated market.

In some desirable areas of town, there are multiple offers on homes, with many potential buyers willing to pay far above list price for the house. By selling custom home lots to future homeowners through sealed bids, Howard Hughes is simply taking advantage of a market where cash is king and people are willing to pay big bucks for a home in a good area, local analysts said.

"In a good market, it's a way to get the best price," said Tim Sullivan, a principal with the California-based Meyers Group. The research firm also has a Las Vegas office. "It's a way to find the buyer who is willing to pay the most."

Warden said it is too early to know if Howard Hughes will expand the sealed bid lot sales to other Summerlin custom-home neighborhoods.

"We've been very pleased with the results, in terms of the sealed bids," he said. "We've had a lot of positive feedback. This is a much more uniform way to do it and fair (way)."