Las Vegas Seeing Huge Gains in Mall Real Estate Sales
The Las Vegas Strip has seen a huge burst of deals so far this year and although this wasn’t in buying the megaresorts, it could be a sign of good things to come. Malls were the main source for the billion dollar deals on the strip, which was very surprising to many as it had been as though American shopping malls were on the decline.
The Demise of American Shopping Malls
According to the website DeadMalls.com, American shopping malls are on the decline. This is not true on Las Vegas Boulevard, however. Near the many resorts where tourists love to walk and hang out, the malls are packed with stores and shoppers who want to spend money in them. This means that investors are looking to put money into mall purchases.
The Indianapolis-based Simon Property Group and Atlanta’s Invesco group purchased The Shops at Crystals for $1.1 billion in April and the New York investment firm TIAA purchased a 50 percent stake in Fashion Show for approximately $1.25 billion just a few months after. Recently, Illinois-based investors Miller Capital Advisory and California public pension fund, Calpers, purchased the Miracle Mile Shops for an undisclosed price, but it is said to be around $1.1 billion.
It is clear that even though malls seem to be on the decline in other parts of the country, in Las Vegas that couldn’t be further from the truth. Over the past five years, there were very few malls that sold for more than $1 billion apiece, according to Green Street Advisors, a research firm. Las Vegas had several that sold for more than that amount.
Not All Strip Real Estate Is Selling
While you would think that if some facet of real estate is seeing gains that most of it would be that is not true for Las Vegas real estate. Land is one thing that is not seeing any gains. Land investors are ignoring the parcels that are available on the strip.
Retail Projects Are Where the Money Is At
While many think that gambling would be a big reason why investors would be buying up property the projects have been tending more towards retail projects than anything else. From alcohol to shot glasses to medicine to snacks, the options are endless as far as what is available on the Strip. A Walgreens property on Las Vegas Boulevard at Convention Center Drive sold for $37 million last year, which is up 33% over what the sellers paid for the property in 2012.
While all of this sounds good, there are some signs that the retail market is beginning to slow down. One sign is the decreased average sale per shopper. Shoppers last year spent an average of $215 per trip, which is down 13% from 2014 and 17% from 2012. This could be an omen for the retail real estate market.
Keep an eye on the retail market to get some clues on where the real estate market may be headed in the future.