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Las Vegas Real Estate Blog

Your Las Vegas real estate information source. The latest news, new construction, scandals, additions to the strip and other Las Vegas and related information.

Wednesday, May 02, 2007

Google updating pr

Google is on the move again. For those of you that have installed the google toolbar (the only toolbar I'll install), you may have noticed that the page rank indicator is showing different results. As of yesterday, not all data center feeding the toolbar have been updated, but knowing Google I'm sure they will be soon.



At 6:02 PM, Blogger CyberCelt said...

Thanks for stopping by Endangered Spaces.

As for the Google Toolbar: They are tracking your surfing history. You may want to read this post

Google You Toolbar

At 11:00 AM, Anonymous Anonymous said...

I have a lot of unanswered questions floating in my head about the effects of the condo high rise market in our community. I also have a genuine interest in the success of Las Vegas, the hard working people who live here, as well as the buyer or new community member entering the housing market or luxury high rise market.

My understanding (from a layman’s prospective)is almost every seasoned or legit developer who has a REAL track record in Las Vegas (that can be verified) has pulled the plug on the their high rise projects. Companies such as the MGM group with a track record are moving forward, rightfully so.

So I started to wonder who the people are behind some of these condo projects that are still trying to sell to decent, unwitting people and in all fairness some of the investment groups laying down real dollars.

I have read the newspapers and press releases. I have read some of the websites implying the expertise and past experience of these so called “real estate developers.” So I tried to do a little homework. Only to find out some of the “developers” that are currently trying to sell un-built projects, have never developed a single house or a single condo, let alone a high rise. It appears that their so called “development teams” lack little if any relevant experience.

High-rise is an entirely different animal, extremely complex and expensive. I must state that I am not an expert in this matter nor am I an investigative reporter but my gut feeling is this is awful for the community and market here. It seems a bit disingenuous and has lasting impacts on the local market as well as serious credibility issues for the city itself.

This may seem a little trite but let’s do the math. It is odd that the “developers” have the stated project values of hundreds of millions of dollars for the cost of their project on their websites like $800 Million. Where does this number come from? Rising material costs + rising fuel prices + rising labor cost + plus rising financing costs = more than the number still posted on the sites for a year or more.

Perhaps this is not much of a metric and yes of course, they could yield less profit, etc. However the cost of capital is nothing to take for granted. Let alone the myriad of other issues associated with large developments.

Let’s take the cost of capital as an example. If permanent financing has not been secured, I imagine some sort of bridge/mezzanine financing has. Maybe not? Usually permanent financing or construction financing occurs after a certain number of sales have been attained. The lending institutions have to have some form of incentive or collateral. Many of the major financial institutions changed their lending practices as the market started to erode making construction financing very difficult.

This type of financing is often referred to as Loan Shark financing. An incredible amount of stipulations are placed on the borrower due to the very high risk profile. Now add the cost of borrowing + the sales and marketing like expensive billboards and fancy sales offices with large staffs. Let us not forget the salaries of the development team, entitlements, such as permits and other regulatory fees, none of which decrease every year.

This does not include architectural, engineering, feasibility, traffic studies, geotechnical, etc. Which are in the $ millions to tens of millions of dollars and frequently more as the project progresses the fee structures often become a percentage of the overall cost of the entire project, separate from initial preliminary services. Printing construction documents alone can easily cost a half of a million to over $1 million dollars.

Another mystery, how does one establish a cost basis on construction and labor when (if ever) the project was penciled out in a spreadsheet two to three years ago? A typical project life cycle of a high rise development is easily two to three years if not more. Do they use spread sheets?

I am unaware of any construction company that would sign a contract in this market for a fixed cost three years ago to start building in 2008 or 2009. It is my understanding that some of these contractors are being paid a fee to maintain their presence on a web site for a very large monthly sum (6 figures plus) so the “developer” can imply confidence and experience to the public and investment community. I do not blame the construction companies. They are in the business of building and that takes scheduling.

It just does not seem to make any financial sense. How many do you think have spent millions of dollars of investor’s money, are stuck and are trying to sell the project behind closed doors? It seems like a lot of smoke and mirrors.

Fortunately, monies received from purchasers cannot be used immediately to finance the development. Thank goodness there are some rules here. Some of us remember the deregulation of banks in the 1980’s and the savings and loan scandals. We as taxpayers had to foot the bill for that fiasco.

I believe this is terrible for the community and the real estate market here. Another one bites the dust has long lasting impressions on the prospective buyer into the LV market.

How does the consumer get a fair opportunity to lay down their hard earned money or an informed prospective when the marketing collateral is nothing more than propaganda? There is a probability that my views are completely incorrect. I imagine there are a few “short answers” but I would really like to know who these people really are and how they continue to operate.

I would love to see a qualified investigative reporter look into some of these projects from a prospective I have yet to see.

Thank you for providing your site and allowing others to comment.


Still unanswered

At 11:16 AM, Anonymous Toby said...

I noticed the move and have to say that I am pleased with the result. It seems that thye have been updated the visual toolbar more frequently then in the past, or it could just be I never knew what I was doing back then :P


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