Who goes to Vegas stays in Vegas? “Sin city”

Published on
June 7, 2022
April 15, 2022

Las Vegas. Gondola rides, replicas of the Pyramids + 24/7 hedonism on tap - it at the very least, garners an opinion from most.

Despite raised eyebrows as to why we were there for Proptech purposes, (one Fund manager wryly checked that we had not mistaken Korean boy band sensation BTS, who were playing in Vegas, for the Proptech company VTS), Las Vegas represents many of the challenges we are seeing in market today.

Sorry, I am just going to mute myself… somebody has just won at the slots

No alt text provided for this image

With over 7,000 rooms + suites + 11,000 sqm of casino floor, if nothing else, the Venetian Hotel complex is a place where your pedometer will make for good reading. Surprisingly for us, there was a co-working space, a strong, craps throw (30 meters) from the smoke-filled gambling halls.

Evidently, addressing space utilization has even forced some of the non-traditional work places to account for the new world we live in + how we consume space.

In our view, this highlights how portfolios of the future really do need to be versatile for the evolving needs of the user. Longer term, we question if the traditional asset classification (+ core metrics) of real estate may be losing relevance with our use of space, having changed, potentially, forever.

Viva Las Vegas….

No alt text provided for this image

As the image from Politico shows, Las Vegas is one of many cities that has seen net migration where the traditional “mega cities” have seen a net loss in population. This is in part reflected in the Zillow home value index which has home values increasing by 25% over the last 12 months in Vegas.

Looking to the wider region, U-Haul, the omnipresent truck hire company, has data further illustrating this migration shift, with Arizona ranked as the #5 destination for truck renters hiring a one-way rental. With California, New York + Chicago being some of the top ranked states as the starting point, for these one way departures, with many also heading to Florida + Texas. The reconfiguration of the population is a real phenomenon.

So does the concept of “amenities” for CRE now encompass proximity to a 4 patty-burger and couple of hands of Texas hold‘em whilst Celine Dione plays at a nearby concert hall.? Or is it a reflection of a mobile enabled workforce, choosing affordability, heat and some vibrant activities - especially as we see a lot of the traditional cities lose their essence.? One to ponder, but when we view this through an ESG lens, the ramifications of these shifts are concerning.

Wat-er is the problem with this?

No alt text provided for this image

Vegas has for a long time been suffering from a major water shortage. Fed 90% of its drinking water from Lake Mead, the Lake (formed from the Hoover Dam) is at its lowest level since 1937.

All non-functional grass is banned from Vegas by 2026 (due to the water it takes to keep it alive) accounting for nearly 1/3 of all grass in the Las Vegas valley. Semi-conductor behemoths like TSMC (which makes 50% of the world’s semiconductors) are building a $12bn plant in order to counter the global, semiconductor concentration risk, in nearby Nevada.

Making semi-conductors is a water zapping industry - TSMC’s production “fab” (factory) is estimated to use 2-4 million gallons of water a day (!) to cool down the equipment. The same water consumption of 15,000 to 30,000 people.

Water rationing is being applied across the West/South West and with greater pressure on things like water supply, the requirement or momentum for tech enabled solutions has to be significant.

But aren’t they building that $1bn Madison Square Garden Sphere arena - so it can’t be all bad?

No alt text provided for this image

Yes they are! And in true Vegas style it straddles the line between needless + awesome pretty well. 18k spectator stadium with the largest ever wraparound digital screen in the world (15,000 square meters) with the sound system being delivered through the floorboards. A city based on attracting external revenue through entertainment and “pizzazz”, it will be extremely interesting to see how it continues to WOW crowds whilst managing the issues discussed.

Ok so what happens now?

No alt text provided for this image

Vegas it seems will continue to be Vegas, whilst like many economies, it wrestles with concepts such as space utilization - asset valuations - affordability - ESG - “Smart Cities” + supply chain risk.

As we have said for a long time, adopting Proptech is not formulaic + is bespoke to the use case(s). There are a number of factors impacting your strategy and selection. Sourcing + adoption has to be viewed with deep consideration of a myriad of interconnected factors.

At the PTC, we do this + we understand that the nuances of the need are paramount to a successful strategy execution.

We will watch closely the developments in Las Vegas and view a great city evolving with the changing times, and look beyond the superficial real estate Circus Circus.

We have a pretty unique view of the global market. Get in touch now to see how we can work together. More information: www.theproptechconnection.com or contact us:

stephen@theproptechconnection.com or ivo@theproptechconnection.com


Media archive

Filter by:
Category
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

Proptech & Housing Affordability

June 1, 2023

Proptech Facts

May 18, 2023

Constructive Changes...

May 11, 2023

Concrete threat

May 4, 2023

Proptech showtime...

April 27, 2023

Proptech (Fun) Facts & insights

April 20, 2023

Industrial Revolution 4.0

April 13, 2023

AI take-over...

April 6, 2023

Powder box

March 23, 2023

It's Electrifying...

March 16, 2023

Proptech Fun Facts by The PTC

March 9, 2023

Unraveling India, one mystery at a time

February 17, 2023

Greenwash

January 12, 2023

All the way to zero

January 5, 2023

China 101 & Proptech

January 4, 2023

Proptech highlights by the PTC

December 27, 2022

Trendsetting Tokyo

January 4, 2023

Singapore, the million dollar question?

November 10, 2022

Recovery under construction?

November 9, 2022

The exponential age of technology...

October 24, 2022

In one word: Draining

August 26, 2022

Has Tech Funding lost its shine?

June 7, 2022

IoT - Proptech’s Wordle

June 7, 2022

ESG and Proptech future

June 7, 2022

The PTC in the news...

June 7, 2022

Going for gold

June 7, 2022

Comparing apples with oranges.....

June 7, 2022