Tony Hsieh has big plans for the redevelopment of downtown Las Vegas,
as his company, Zappos, prepares to move up to 1,500 people into old City Hall
in the center and heart of old Las Vegas.
But despite spending well over $100 million to purchase dozens of acres of downtown property -- old motels, empty lots, empty storefronts and more empty lots -- Hsieh's Downtown Project isn't the only player in downtown's "SimCity" game to rebuild the area.
Downtown Project has dedicated $200 million to real estate. The Sun earlier this year reported Downtown Project's purchase of 90 parcels totaling 50 acres for $110 million. Most of those purchases have been made since the start of 2012.
With additional purchases since then, Downtown Project's total comes to about $193 million, said Geoffrey West, investment specialist with Cushman & Wakefield Commerce, a commercial real estate firm.
But that's only half the story. Hsieh and the Downtown Project may have begun downtown's revival, but others are following.
Additional data collected by Cushman & Wakefield show in a select downtown area defined roughly by U.S. 95 north, the Union Pacific railroad tracks west, Oakey Boulevard south, and jogging northeast from Las Vegas Boulevard to Bruce Street, a total of $390 million in commercial real estate has been purchased since 2010.
Year by year, it looks like this:
2010: 24 properties for $92 million.
2011: 45 properties for $29 million.
2012: 90 properties for $155 million.
2013: 50 properties for $114 million (through June 20).
A map of those properties shows what most who follow downtown already know: many properties purchased are downtown near the Fremont East Entertainment District with the second most clustered around the Arts District, generally located near Charleston Boulevard and Main Street.
In between those two clusters lies something of a no-man's-land, a gap in purchases and sales indicative of little movement in retail, office or other business ventures, said Dan Palmeri, office specialist with Cushman & Wakefield Commerce.
"We need to be able to fill those gaps for the walk between Soho Lofts and Juhl," he said, referring to two multi-unit residential buildings that went up during the boom years, "between Main Street and Commerce, between the Arts District and Fremont East."
West said the "lack of investment in the connecting areas creates isolated pods of activity rather than a truly interconnected downtown."
Make no mistake, Palmeri added, downtown's emergence is dramatic.
He remembers a time when businesses wouldn't locate in the city proper because they didn't want their address to include "Las Vegas."
"It's that sin perception," he said.
Yet office space, at $115 million, accounts for the largest property purchases over the past four years collected by Palmeri and business partner Geoffrey West. Multifamily properties account for the second-highest amount of purchases, at $78 million, followed by hotels/motels, $76 million; land, $46 million; and retail, $42 million. Industrial and "other" made up $31 million.
Also, the two biggest years are 2012 and 2013. West and Palmeri marvel at the sheer volume of purchases over that time, given it has really only been about 18 months since the Downtown Project's purchases began. The volume of sales in 2013
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