Anyone reading our blogfeed lately will note the trending analysis of the resurgence of hotel development in Las Vegas after a 6 year lull. Price comparison of several small local hotels put the average price of $5M per 55 rooms.
The hotel property previously mentioned is actually 2 adjacent properties that had flipped more then once in 2016; indicating the volatility of the hotel real estate market in Las Vegas that saw land sell for up to $33M per acre in 2008. Land parcels between 2015-16 on the north Strip have already seen purchases between $37M for 1.6 acres and $50M for 2 acres. This volatility justifies the formation of a SPAC or SPV to have funding in place for acquisitions rather then the slow process with conventional finance that may take 3-6 months. Long after a property may be sold.
The purpose of this blogpost is the define the components / phases / costs for the hotel/ film studio /industrial park.
(1) Phase 1: Two HOTEL’s
The 2 hotels are adjacent to each other. Both are undergoing remodeling and both are 3 stories. One is 44 rooms and the other is 91 for a total of 135 rooms which can house up to 270 people.
The smaller hotel has an a listing with an undisclosed price that according to the brokerage firm is reportedly $3.2 to $3.5M. This makes the estimate for the larger hotel at least $6.4M. Estimated combined total price is $10M.
These 2 prime hotel properties have easy on-ramp access to I-15 and are 2 miles from an interstate interchange that is ranked #22 busiest in the US by USA Today. This 2 mile freeway stretch to the interchange is currently undergoing major expansion to at least 10 lanes wide.
Another adjacent (unrelated) currently operating hotel with 64 rooms has been featured on A&E TV & Cinemax and this blogfeed has already reported that the hotel can be rented in it’s entirely for $7,500 per night. That indicates an annual gross revenue of $2.7M.
(2) Phase 2: Two-tenant capacity, 20,000 s.f. industrial WAREHOUSE
This warehouse has office and warehouse capacity for 2 tenants. The warehouse was built in 1980 and has 2 truck dock doors and ceiling height of 22 feet. It reports an annual $84,000 NNN income which would provide a break even of the acquisition price of $1.8M in 22 years.
This warehouse is within walking distance of the 2 adjacent hotels. One tenant unit is slated for a rotation of film production firms from Los Angeles and the other unit slated for light industrial firm’s like the green tech construction supplies manufacturer mentioned at the onset of this blogpost in 11/16.
Both hotel’s and the 20,000 s.f. warehouse are only blocks from the Vegas Strip and the $4B hotel-casino development owned by Malaysian investors
Phase 2 is a transitional aspect to Phase 3 for the following reasons. It will take at least 1 year to survey, grade, add roads, curbs and solar street lights to the industrial park. The government agency negotiation to speed up this process will include but not limited to the following agencies;
(a) Rural Nevada Development Corporation
(b) Nevada Governor’s Office of Economic Development
(c) Regional Business Development Advisory Council
(d) Nevada State Development Corporation
(e) Las Vegas Global Economic Alliance
(f) City of Las Vegas Economic Development
(g) The Las Vegas Economic Impact Regional Center (EB-5)
(3) Phase 3: 160-acre industrial PARK outside Las Vegas
Industrial Park is to be 100-acre light industrial mixed-use and 60-acre Film production/ TV broadcasting campus consisting of about 32 pads of 5 acres each.
State highway frontage to park is projected to consist of truck stop / restaurant / convenience store / coin laundry & dry cleaners / mailboxes & postal services
A cargo airport proposed to be built nearby would provide fights to Burbank and Phoenix in 1 hour
Light industrial is already forming in area include solar array farms
Other retail & recreation in area include golf course, roller coaster, casinos, & outlet mall
Minutes from I-15 with 2 hour trucking access to cities in 3 states.
Total direct and indirect jobs created: 1,000
Land acquisition price $1.5M
COMBINED initial project cost of 2 hotels, 1 warehouse, land, billboards & DPO/REIT/ESOP offerings: $15M with US Treasury LTV funding up to 80% + 39% investor tax credit prorated x 7 years.
Further details previously mentioned here;