Real estate execs foresee big retail market growth

Kevin Rademacher

Thursday, April 28, 2005 | 10:59 a.m.

Despite rising costs for land, construction and rent, the Las Vegas retail market continues to bustle.

So much so that the looming International Council Shopping Centers isn't quite the local event it used to be. Experts participating in a panel discussion on retail trends said on Tuesday that as Las Vegas matures, major retail tenants don't wait until the huge industry convention makes its annual appearance here to check out the landscape.

"Las Vegas has become such a destination ... ICSC is no longer the impetus for those tenants to come here," Christina Roush, an executive with CB Richard Ellis, said at a meeting of the Southern Nevada chapter of the Certified Commercial Investment Member Institute.

Additionally, the panel said that major retail tenants are looking beyond the Strip for locations.

"Most of them are starting to realize that there is an untapped secondary market in Las Vegas," said Nick Hannon, president of development for the Montecito Cos.

Despite the interest, the panel also discussed whether Las Vegas had enough residents to support those tenants given that at least two new malls have been discussed -- Triple Five Development's Great Mall of Las Vegas near the Beltway and U.S. 95., and a Summerlin mall planned by General Growth Properties Inc.

Real estate executives pointed to the continued growth of Las Vegas as a positive trend.

"If growth stops, the answer is right there," said Frank Volk, executive vice president with Robert K. Futterman & Associates. "But right now we're selling 25,000 new homes a year."

He added that by the time a new mall opened, the Las Vegas Valley stands to be much different.

"New residents are probably not going to go down to the Forum Shops to pick up knick-knacks," Hannon said.

The panel also pointed to a possible brighter future in the long-standing effort to spark downtown retail development, pointing to the success of the nearby outlet mall, the proposed performing arts center and the World Market Center.

It could, the panel agreed, be enough to revive the struggling Neonopolis development.

"I think Neonopolis is poised to capitalize on the development that's already going on," Volk said. "You can't buy land down there (now) for what you can build a shopping center on. I think it looks rosy for Neonopolis."

Roush, whose firm is marketing Neonopolis for sale, said "several interested parties" have proposed a variety of new concepts for the property.

"They all have different ideas for the use of the property," she said. "Every imaginable use."

A concern for the panel was rising construction costs. Mike Kammerling of Grubb & Ellis Las Vegas said that the crunch could get worse given the major construction projects that will soon be under way with MGM Mirage's CityCenter mixed-use project, Steve Wynn's second hotel and the second hotel at the Venetian.

"The cream of the contractors and the suppliers are going to be committed," he said, adding that it could be a particular problem for the scores of proposed high-rise projects in Las Vegas.