Las Vegas real estate investing: a golden opportunity, or a shimmering mirage? Las Vegas, a city synonymous with vibrant nightlife, world-class entertainment, and luxury resorts, is also emerging as a prime location for real estate investors. The city’s dynamic growth, a burgeoning job market, and a diverse population present a unique opportunity for accredited investors looking to diversify their portfolios with commercial real estate (CRE) investments.
This article explores why Las Vegas is an attractive market for real estate investment. Like many growing markets across the U.S., individual self-directed investors can now take part in Las Vegas real estate investing passively and at relatively low minimums via EquityMultiple.
Las Vegas is about much more than gambling these days. It has become a “city of neighborhoods” with a diversifying local economy.
Real Estate Investing Las Vegas — Historical Perspective
At EquityMultiple, one of our key criteria for market selection is a diverse local economy. In recent years, Las Vegas has grown from dependence on gaming and tourism to more of a global city, with diverse demand drivers and a wellspring of human capital.
Thirteen years ago, Las Vegas was overly reliant on tourism, which made it exceptionally vulnerable during the economic downturn of 2008-09, according to Vivek Sah, who leads the Lied Real Estate Institute at the University of Nevada Las Vegas. The city’s recovery took several years, only beginning in earnest around 2013.
One challenge deterring businesses from establishing themselves in Las Vegas, as highlighted by Sah, was the city’s underperforming educational system. Despite this, the local job market, especially in casinos and resorts, allowed even those without advanced education to command salaries in the six-figure range. Additionally, the city was served by a single university.
In a bid to diversify its economy, Las Vegas is now aiming to carve out a role in the burgeoning tech industry, mirroring efforts seen across the United States.
The state of Nevada benefited significantly from Tesla’s decision to open a ‘gigafactory’ in Sparks, as noted by economic analyst Curtin. This move spurred investment in Nevada, leading to real estate and price growth surpassing national averages.
In 2019, CBRE Group, a leading commercial real estate services company, recognized Las Vegas as a rising star in the tech talent market. Google’s announcement of its $600 million facility in Henderson, promising jobs for at least 50 employees with salaries averaging $65,000, underscores the city’s growing appeal in the tech sector, significantly above the national median household income. Other major tech companies are headquartered or have a large presence in the metro area, such as Zappos, DraftKings, and IGT.
The University of Nevada at Las Vegas is contributing to this shift by launching a tech incubator named the Harry Reid Research and Technology Park, in honor of the former senator, with projections of creating 25,000 jobs and generating $2.6 billion in economic output.
Las Vegas has also initiated an innovation center in collaboration with Startup Nevada, supported by federal funds, to foster new businesses, facilitating the testing of technological innovations, including autonomous vehicles, on its streets.
This surge in job creation has led to increased demand in the housing market across the Las Vegas metropolitan area, encompassing Las Vegas, North Las Vegas, and Henderson, supercharging the real estate investment scene.
The influx of tech professionals is driving up housing prices, further fueled by a labor shortage in construction. Despite national recoveries, Las Vegas’s construction workforce has not returned to its pre-recession peak, resulting in less housing construction and a tendency to build more expensive homes. The city’s expansion is also limited by the vast amount of federal land in Nevada. These supply constraints, combined with demand drives, create opportunity for multifamily investing in Las Vegas.
However, this economic boom has its drawbacks, notably the increasing unaffordability for middle-class families. The recent trend of remote work, accelerated by the pandemic, has made Las Vegas a desirable location for digital nomads, potentially altering the city’s demographic landscape.
Las Vegas’s evolution from a railroad town to an entertainment powerhouse and now a burgeoning tech hub is a testament to its adaptability and ambition. Founded in 1905, the city experienced significant growth from the construction of the Hoover Dam and the rise of casinos in the mid-20th century. Recent years have seen efforts to diversify its economy, particularly after the tourism sector was hit hard by the Covid-19 pandemic. The city, now the nation’s 25th-largest metro area with a population of about 2.3 million, continues to attract newcomers with its vibrant lifestyle and economic opportunities, promising an exciting future.
The Allure of Las Vegas Real Estate Investing
Economic Diversification and Growth
Las Vegas is experiencing a significant transformation, moving beyond its traditional reliance on tourism and hospitality. The city is becoming a hub for tech companies, startups, and a skilled workforce, contributing to economic diversification and stability. This shift is creating a demand for commercial spaces, office buildings, and residential properties, positioning Las Vegas as fertile ground for CRE investments.
The city’s economy is not just expanding; it’s evolving. With projects like the $1.9 billion Allegiant Stadium and the $375 million T-Mobile Arena, Las Vegas is attracting major events and conferences, further diversifying its economic base. This economic growth benefits the real estate market, as these developments drive demand for both commercial and residential properties.
Population Growth and Housing Demand
Las Vegas’s population is on the rise, with new residents drawn by job opportunities, a favorable tax environment, and a high quality of life. This growth is driving demand for housing and rental properties, pushing up property values and rental rates. For investors, this means potential for high returns on investment properties and development projects.
Recent data shows Las Vegas among the top U.S. cities for population growth, with a year-over-year increase of 2.2%. This surge translates into a robust housing market, with median home prices rising by 13.7% over the past year. Investors have an opportunity to capitalize on both the short-term rental market and long-term property appreciation.
Market Resilience and Potential for Appreciation
Despite past economic downturns, the Las Vegas real estate market has shown remarkable resilience. The city’s efforts to diversify its economy and attract new industries have made it less susceptible to fluctuations in the tourism sector. Moreover, with limited land available for development due to federal land restrictions, property values in Las Vegas are poised for appreciation, offering long-term gains for investors.
The resilience of the Las Vegas market is evident in its recovery from the 2008 financial crisis. The city was one of the hardest hit but has since rebounded strongly, with property values now exceeding pre-crisis levels. This recovery demonstrates the market’s potential for growth and the opportunity for investors to achieve significant returns on their investments.
EquityMultiple’s “EM Markets” framework scores markets like Las Vegas for real estate investing appeal. As of Q1 2024, Las Vegas ranked in the top 25 among all major real estate sectors, and designated a “surging” market. Las Vegas ranked highest for self-storage, at #12.
Investing in Las Vegas with EquityMultiple
EquityMultiple stands out as a platform offering accredited investors access to vetted commercial real estate opportunities in Las Vegas and beyond. Our platform emphasizes due diligence, industry knowledge, and a curated selection of investment opportunities, aligning with the needs and preferences of sophisticated investors.
Diverse Investment Opportunities
EquityMultiple offers a range of investment opportunities in Las Vegas, from office buildings and retail spaces to multifamily units and specialized real estate like cannabis facilities. Our platform allows investors to diversify their portfolios within the realm of CRE, tapping into different sectors and property types.
Investors can explore opportunities in emerging neighborhoods and districts benefiting from Las Vegas’s economic expansion. For instance, the Downtown Las Vegas area is undergoing revitalization, attracting tech startups and creative businesses, boosting demand for office and retail spaces.
Expertise and Due Diligence
At EquityMultiple, we pride ourselves on our rigorous vetting process and deep industry knowledge. Our team of experts conducts thorough due diligence on each investment opportunity, ensuring that our investors have access to projects with strong potential for returns. This expertise is particularly valuable in a dynamic market like Las Vegas, where understanding local trends and regulations is crucial.
Our due diligence process includes a comprehensive analysis of market trends, property valuations, and potential risks. This ensures that our investors are well-informed and can make decisions based on a solid understanding of the Las Vegas real estate market.
EquityMultiple can guide you to streamlined real estate investing in Las Vegas and across the U.S.
Accessibility and Support
Investing in commercial real estate can be complex, but EquityMultiple makes it accessible and straightforward. Our platform provides extensive support and educational resources to guide investors through their investment journey. Whether you’re new to CRE investing or a seasoned investor, EquityMultiple offers the tools and information you need to make informed decisions.
We offer personalized support to our investors, helping them navigate the complexities of CRE investing. From selecting the right investment opportunities to understanding the intricacies of the Las Vegas market, our team is here to assist every step of the way.
Real Estate Investing Las Vegas —The Bottom Line
Real estate investing in Las Vegas presents a compelling opportunity for accredited investors. The city’s economic growth, population increase, and market resilience create a favorable environment for investment. With EquityMultiple, investors can explore a curated selection of CRE opportunities in Las Vegas, backed by expert due diligence and comprehensive support. As Las Vegas continues to evolve, now is the time to consider adding this vibrant market to your investment portfolio.
Las Vegas Real Estate Investing FAQs
Q: Why is Las Vegas considered a good market for real estate investment? A: Las Vegas is experiencing economic diversification, population growth, and limited land availability, which contribute to a strong demand for real estate and potential for property value appreciation.
Q: What types of real estate investments are available in Las Vegas through EquityMultiple? A: EquityMultiple offers a variety of CRE investment opportunities in Las Vegas, including office spaces, retail properties, multifamily units, and specialized real estate like cannabis facilities.
Q: How does EquityMultiple ensure the quality of investment opportunities? A: EquityMultiple conducts rigorous due diligence on each investment opportunity, leveraging industry knowledge and expertise to select projects with strong potential for returns.
Q: Can novice investors participate in CRE investments through EquityMultiple? A: Yes, EquityMultiple provides extensive support and educational resources, making CRE investing accessible to both novice and experienced investors.
Q: What makes Las Vegas a resilient real estate market? A: Las Vegas’s efforts to diversify its economy, attract new industries, and its limited land availability for development contribute to its market resilience and potential for long-term property value appreciation.
