The Ebb and Flow of Strip Real Estate Values

VegasAs some of the most expensive commercial real estate in the world it’s pretty common to see hundreds of millions of dollars flying around whenever someone wants to build a new hotel on the strip. What’s staggering is just how much those prices have varied over the years with the good times and the bad. Below we’ve compiled a look at just how finicky those prices have been over the course of 16 years in Vegas.

1998 – Two of the major land deals that happened this year were Phil Ruffin’s purchase of the New Frontier property for (25.5 Acres at $5.6M/Acre) and Steve Wynn’s purchase of a parcel of land (11.3 Acres at $10.1M/Acre).

2000 – This year Wynn would strike again with a much more reasonable purchase price when he bought the 220-Acre property that used to be the Desert Inn, paying “only” $1.2M per Acre.

2003 – The absolute highest price at the time paid for real estate on the Vegas Strip happened this year when retail developers bought a small parcel of land beside the Venetian to open a Walgreens. The price? An incredible $32.5M for the property that was only .64 Acres, working out to a per Acre price of $51M.

2004 – The first major transaction of 2004 was the purchase of the land that would become The Cosmopolitan (a $90M total deal with a price of $17.8M per Acre). The next deal of the year was for 3.6 Acres that was to become a condo development (which later went bust) at a price of $7.3M an Acre.

2005 – The Westward Ho is sold for $145.5M at a cost of $9.5M an Acre. Harrah’s buys the Imperial Palace for a total cost of $370M or $20.1M per Acre.

2006 – Harrah’s buys the Westward Ho land sold in 2005 for $279.9M or $18.4M per Acre, an $8.9M increase in the per Acre price from just a year before.

2007 – A ton of transactions happened in 2007 about a year before the recession hit the US and other parts of the world. Deals included MGM buying 25.8 Acres for $17.2M/Acre, SBE buying a 17.5 Acre parcel for $345M or $19.7M/Acre and a developer paying $180M for a 5.4 Acre parcel ($33.1M/Acre).

2010 – Two years after the recession had hit Vegas hard, a developer and a group of partners bought a 2.15 parcel of land on Harmon Avenue paying $25M or $11.6M per Acre.

2012 – The record breaking parcel of land that was acquired in 2003 for $51M an Acre to build a Walgreens is sold to Venetian/Palazzo for $71M, almost a $40M profit for the developer on the sale.

2013 – Genting Group purchases the land of the New Frontier for $350M or $4M/Acre. This same piece of land had sold for over $33M/Acre just 6 years earlier – talk about a bad return on investment.

Vegas Strip Highest Price per Acre

Sources – Clark County Assessor, Las Vegas Sun