Little action at BLM auction: 31 parcels for bid; one sold

The Bureau of Land Management sold a 15-acre parcel at Welpman Avenue and Pollack Drive in Henderson for the minimum bid of $7.8 million, or $520,000 an acre. The land was bought by a San Francisco family with real estate holdings in Las Vegas.

"I told you it wouldn’t take long," auctioneer Mike McKee said after seven or eight parcels received no bids. The auction, held at Clark County Government Center, was over in about 45 minutes.

The appraised value for the total 168 acres for sale was $72 million, or $429,850 an acre.

Anna Wharton, supervisory realty specialist for the BLM, said the federal agency contracted with an appraiser in Las Vegas who sets the fair market value of the land based on comparable sales of similar-size properties in the area.

The parcels are nominated for auction by the city or county government in which the land is located, usually based on someone’s expressed interest in buying the land, she said.

"People who were interested, whether they’re still interested today, who knows," Wharton said. "The market does play a big role at the sale. We’re just going to have to wait and see what happens. The market is still correcting."

The BLM’s appraised values were simply too high, said Ofra Gelman, director of commercial studios for SH Architecture in Las Vegas. Many of the properties had encumbrances such as underground telephone and power lines and road easements, she said.

"It’s no big deal on a 15-acre parcel. You can always put parking on top of an easement and still have room for building," Gelman said. "If you have all those required easements on five acres, you have hardly anything left over to build on."

Nevada State Bank real estate loan officer Andy Chaudhuri was going to use the BLM land sale to justify why he should continue making land acquisition loans.

"Hearing that one (parcel) sold is not good news for me," he said.

The average price for an acre of land in the Las Vegas Valley was $677,000 in the third quarter, Jeremy Aguero of Applied Analysis reported. He’s seen a sharp decline in the volume of land transactions.

The BLM auction bust is an "outcropping" of previously expressed concerns that land prices are making most projects cost prohibitive, he said.

"If I’m paying $600,000 or $700,000 an acre, there’s a limited number of uses I can put on that at current rents," Aguero said. "You’re not seeing enough rent growth in office, apartments, industrial and to a lesser extent, retail, to make it work."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.