Wednesday, Jan. 12, 2005 | 9:23 a.m.
For the past week Richard Lee, vice president of First American Title Co, has been meeting with landowners, developer and homebuilders about the upcoming February Bureau of Land Management auction.
"That's been the topic of conversation for every lunch for the last week," he said.
But Lee, who is considered a local land expert by many, is stumped, as are a great many other people, about what the upcoming government land auction will bring.
"I'm talking to lots of people and my crystal ball is foggy," he said.
The BLM is offering 2,284.7 acres in 60 parcels for sale at its Feb. 2 auction at the Cashman Theater, 850 Las Vegas Blvd. North. The location was changed to accommodate the overflowing crowds that show up at each sale, said Judy Fry, who supervises BLM sales. The theater can seat up to 2,000 people.
Parcels at the sale vary in size from 1.25 acres to a 1,710.86-acre piece referred to as the Kyle Canyon Gateway parcel. Three parcels totaling 359 acres in Lander and Elko counties also will be offered at the February auction.
Total price tag: $369.35 million.
The Kyle Canyon parcel alone is appraised at $323 million, making up the bulk of the auction.
Auction outcomes have always taken local experts off guard, as prices for land are often bid up far beyond the appraised value.
But this time around, the market dynamics are a bit different, making it unclear what could ultimately happen, many said.
"The market has changed quite a bit," said John Ritter, chief executive of Focus Property Group. "I don't think we're in a bubble that will burst, but I think there will be flat growth in (home) pricing."
Ritter bought 1,940 acres in Henderson at the June auction for $557 million, or $287,113 an acre, along with a consortium of seven homebuilders. The land was appraised at $250 million.
Ritter said the Las Vegas market has slowed down from the frenzied days of early 2004.
"Given the current market dynamics, if we decide to bid on some of the larger parcels, we won't be as aggressive as we were at the Henderson auction," he said. "I wouldn't be surprised if someone else walks away with this one."
Gary Mayo, vice president and Las Vegas division manager for Toll Brothers, said he expects prices will approach those of the last land auction.
"I'd like to not see that, but I think they will," Mayo said.
Toll Brothers was part of the group that bought the Henderson land with Ritter at the land auction. Mayo was mum as to whether the company would participate in February's auction.
Other large developers and homebuilders are expected to participate in the upcoming auction, but no one wanted to talk about their plans.
One good indicator as to what might happen at the February land auction, at least in terms of the 1,700-acre piece, is a look at history. In the past, land in the north of the Las Vegas Valley has sold for less than land sold in the south, Lee said.
But having said that, Lee acknowledged demand for land continues to be intense in the valley.
"I think it is a very heated, competitive market and I think it will sell for close to what it (land) sold for last year," he said.
The auction is relatively small compared to the auction many were expecting after 2,395 acres near the master-planned community of Aliante in North Las Vegas was pulled from the slate after endangered plant species was found on the land last year.
That parcel, appraised at $335 million, is now scheduled to be offered for sale at an August land auction, Fry said.
The BLM also is working on a June 15 auction of 2,000 acres in the Laughlin area. Several parcels will be offered for sale, ranging from 1.25 acres to 582 acres, Fry said.
People interested in bidding at the Las Vegas auction must submit a $10,000 deposit in certified funds payable to BLM on the day of the sale to obtain a bidder number. To bid on the 1,710-acre parcel, a $64.6 million deposit is required on the day of the auction.
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