Multi-million dollar homes, hot cars and over-the-top travel are nothing unusual for high net worth individuals in Nevada. In fact, luxury living is becoming more common here, according to experts surveyed by Nevada Business Journal.
One well-known expert on “champagne wishes and caviar dreams” is Robin Leach, who moved to Las Vegas seven years ago to be close to the rich and famous people he has made a career of publicizing. “Why move to Las Vegas? Because it’s the No. 1 city in the world for luxury,” said Leach. “For people who live in Nevada, whether it’s in Las Vegas, Reno or Lake Tahoe, the grass is not greener on the other side of the fence. We have everything here. Take it from someone who’s been around the world 10 times and visited nearly every country.”
Robert S. Davenport, a financial planner and partner of Partners Financial Group in Las Vegas, said he is seeing people acquire bigger and better homes and many “toys,” such as sports cars, airplanes and second homes. “I also see my high net worth clients taking better vacations, often to deal with stress,” he said. Other business and personal priorities established by high net worth individuals, according to Davenport, include independence, preparing for succession, asset protection and alternative investment strategies.
Chet Holmes of San Rafael, Calif.-based howtodoublesales.com is a business expert and consultant who teaches businesses how to target high net worth individuals. He said it takes commitment and dedication to reach wealthy consumers, but since the wealthy are the movers and shakers of the world, and have the greatest sphere of influence, the payoff is worth it. “The wealthy like to be leaders and not follow the crowd,” said Holmes. “Let’s remember they are probably self-employed, and they didn’t get rich by following everybody. They are also big believers in getting good value. So, just because they are rich doesn’t mean they don’t want to get their money’s worth when they buy something.”
THE GUY & GAL NEXT DOOR?
“Aside from the obvious millionaires, there are many out there whom you would not think are millionaires,” said consultant Georganne Bender, a partner in the St. Charles, Ill.-based Kizer & Bender Speaking. “Good jobs and smart investing have helped a lot of people. In a very exclusive – and expensive – Las Vegas shop, we asked a salesman to describe the customers who buy their products. He said we’d be surprised, because they always aren’t the most obvious choices. The man in the shorts and tank top standing next to you might drop a fortune and never bat an eye. Some live extravagantly, some watch every dime, and some live just like the rest of us. Many luxury shoppers enjoy a bargain as much as the next guy.”
Some Generation X-ers have made their money in the technology fields, but the 50-plus market is the one to watch, experts said. “People over 50 represent 50 percent of consumer demand,” Bender said. “They have 2.5 times the discretionary income of younger generations. In fact, one in four homes sold today is a second home for a baby boomer.”
There is also a trend for the well-heeled to shop at mass merchandisers. Target is already attracting affluent shoppers, and Wal-Mart is now branching out into the luxury retail market. It recently opened a store in Plano, Texas, complete with high-priced wines and sushi, designed to appeal to a more sophisticated demographic.
A common mistake many companies make is not giving these consumers the attention they feel they deserve. “They expect to be treated with respect – and lots of it,” Bender said. “They enjoy little creature comforts while they shop and while they wait. They want a quality experience. And they enjoy personal relationships with the places where they do business. Luxury buyers are used to first-class treatment. They do not care for the little annoyances that the rest of us put up with, like parking the car, dodging crowds and waiting in line to pay for purchases.”
Multi-Million Dollar Homes
Homes, be they first or second, usually show a millionaire’s spending power. Northern Nevada offers a lifestyle attractive to growing numbers of millionaires, said Sue Lowe, vice president of Chase International, a Lake Tahoe/Reno-based real estate agency. A year-end analysis by the agency showed sales of Lake Tahoe homes priced higher than $1 million jumped 46 percent in 2005, while sales of single-family homes costing under $1 million were down 21 percent.
“Lake Tahoe, of course, has always been attractive to millionaires, but the Carson Valley, Carson City and Reno residential markets have all shown recent phenomenal increases in purchases of over $1 million,” said Lowe. Sales of homes in Reno priced more than $1 million jumped 65 percent, while sales of homes under $1 million were up only 3 percent. The report, comparing year-end figures from 2004 to 2005, showed that 1,126 Lake Tahoe homes priced below $1 million sold in 2005, compared to 1,432 in 2004. Homes sales in the million-dollar-plus price range increased from 214 to 312. Overall sales volume around Lake Tahoe grew a notable 9 percent to nearly $1.3 billion, while overall Reno and Sparks sales volume increased a remarkable 27 percent to nearly $2.5 billion.
Lowe said millionaire lifestyles in the area range from comfortable to opulent, and popular home features include granite interior finishes, along with decked-out bathrooms, kitchens and pool/spa areas. “Wine cellars, spas, theaters and water amenities are all important,” she added. Lowe has spent years cultivating a high-end clientele and considers baby boomers her primary market.
Reflecting these changes, the average home price in the Reno and Sparks area is up 20 percent to $409,106. Lowe noted that a good portion of her clientele come from the San Francisoco Bay Area to buy second or vacation homes or investments. The U.S. Bureau of Labor Statistics acknowledges that employees in the Bay Area receive some of the nation’s highest salaries. “While the national real estate market seems to be cooling, sales are still strong in Lake Tahoe and Reno, even as home prices continue to climb,” Lowe said. “It’s simply a desirable place to live or escape to.”
The director of marketing and co-sales director for Spanish View Tower in southwest Las Vegas, Jeannine Cutter, said she has specifically targeted high net worth individuals in Las Vegas and nationally. “We have noticed a trend towards a younger age in buyers who have the ability to buy high-end products, such as homes at Spanish View Towers. It seems the baby boomers prefer to sit on their money, whereas their children have a different value system when it comes to money. The post-baby boom generation is investing it in high-end commodities, such as valuable real estate. The increase in this age group has been slight; however, it is a significant trend to recognize.”
Laurence Hallier, the developer of Panorama Towers in Las Vegas, is also chairman of Hallier Properties and Hallier Investments. At age 38, he created his first high-rise – and hasn’t looked back since. Hallier said residents of Panorama are responding to some of the more innovative amenities, such as a racquetball court and a dog-walking service. Views are also extremely important to his high-end clientele. “We built three-story portals into our first two towers that offer sprawling balconies with more than 1,600 square feet of space and stunning, panoramic views of the Las Vegas Strip and the Spring Mountains to the west. We focus a lot of attention on marketing the superior views we have at Panorama, even taking some buyers up in a crane to show them what the view will look like from the condominium they’re considering,” he said.
Jack Christie, vice president of sales and marketing for Trump International Hotel & Tower Las Vegas, said amenities like 24-hour valet parking and concierge service add to the luxury experience. “Of all the features in the models, the marble in the entryway and baths attracts them right away. But while it is an attractive feature, it is the complete package of the luxury suites, amenities and location that gives them a multitude of reasons to buy,” he said.
Beyond aesthetics and high-end finishes, James Beasley, president and CEO of Beasley & DeVarreau Sotheby’s International Realty in Las Vegas, said some of the more important elements for the luxury home buyer are: convenience; security; amenities within the community; locations for schools, shopping, medical and recreation; and views and privacy from a specific residence. Some examples of the more unusual features of luxury estates are basketball courts, racquetball courts, golf course simulators, gymnasiums, world-class spas with indoor swimming pools and massage rooms, luxurious theaters and screening rooms, climate controlled collectors’ garages for 10 to 20 automobiles, and incredible water features that rival world-class resorts.
Kenneth Lowman, Luxury Homes of Las Vegas broker/owner, said his millionaire customers come from all walks of life, all age groups and all states. Lowman focuses his business on higher-priced luxury homes and development. “They include retiring boomers who have worked 30 or 40 years amassing their wealth, entrepreneurs who hit it big, individuals who have owned their own businesses, upper-level corporate managers, athletes, entertainers and wealthy heirs.” Lowman said Nevada attracts millionaires because it does not assess state income tax, while offering great weather, good lifestyle, and a positive and growing economic environment.
“We see more and more wealthy people moving here each and every month,” said Lowman. “They typically like to live in guard-gated communities for security, and also because they travel. They also want the amenities that guard-gated communities offer, such as golf, tennis, social clubs and neighbors with common interests.”
Lowman said his high net worth clients like activity, travel, entertaining and the finer things in life. “These successful people want to be able to enjoy views of a golf course, lake, mountains or city lights when relaxing at home,” he said. Recent requests made by affluent home shoppers have included indoor basketball courts, 12-car subterranean garages, indoor swimming pools, 3,000-bottle wine cellars, 24-seat home theatres, indoor shooting ranges and glass elevators.
When not luxuriating in their Nevada homes, people with money like to travel – sometimes far, far away.
Laura Emerson, an agent with Welcome Aboard Travel in Reno, has developed a specialty in planning travel for high net worth clients. Barbara Vucanovich opened Welcome Aboard Travel in 1969, and the current owners continued with the business in 1977. “Each client is unique in his or her lifestyle,” Emerson said. “Many have extreme schedules and are constantly on the move. Others plan and take from one to four nice vacations per year. Many are self-employed or retired.”
Emerson said every client is unique regarding what he or she considers a great vacation. “Some want a private beach and bungalow, some want a full-service suite with pool and fine dining, some want extreme sports and lots of activity and others want convenience and spa pampering,” she said.
Over-the-top trips Emerson has planned for clients included trips to Antarctica, private island resorts in Fiji, a 70th birthday bungee jump in New Zealand, an African safari, a Russian railroad trip, helicopter hiking, Nepal and Mt. Everest treks and villa or castle stays with chauffeured tours in Europe. “The world is a playground with unlimited options for nearly everyone’s dreams and imagination,” she added.
Maria Ruiz, director of marketing for Prestige Travel & Cruises American Express, said millionaires walk in to Prestige offices in the most casual of clothes and book an around-the-world cruise, an African safari, a crossing on the Queen Mary II or a ride on the Simplon Venice Orient Express.
Ruiz said her firm’s American Express affiliation has helped increase business from upscale and affluent clientele. “Some clients are what we call ‘old money,’ belonging to rich families, and some are ‘new money,’ the new successful entrepreneurs who have done very well with their business ventures and other projects,” she said. “Their lifestyles can range from being just simple to extravagant. They may have money, but monitor expenses on the vacations they purchase. Like everyone else, they are still looking for the best value and amenities.”
She added that upscale clients and travelers are extremely savvy when planning their vacations and trips. “They do extensive research, so our travel agents have to be prepared and ready to give them the best service and product/destination information.” Ruiz said some of her company’s high-end trips included: touring a series of villas complete with private car and driver for the entire stay in Italy and other countries in Europe; ballooning over the Masai Mara in Africa; taking African safaris and staying in the most luxurious accommodations; around-the-world trips; accommodations in presidential suites and garden villas aboard cruise ships.
“Upscale clients are looking for a more ‘life-enhancing’ vacation experience, so they’re looking to do a trek in Machu Picchu, or climb Mt. Kilimanjaro, or do a private tour of the Hermitage Museum in St. Petersburg,” said Ruiz.
The upscale client has become younger, Ruiz said. With the business climate focusing on technology, hospitality and lifestyle trends, her clients are looking for more amenities than ever before. “They are also very active, so they’re looking to play golf at award-winning courses from Las Vegas to Cabo San Lucas and Hawaii and St. Maarten. They are also looking to decompress, relax and refresh, so they take spa vacations in Hawaii, Europe and other places.”
Of course, Nevada has plenty to offer high net worth travelers, too. Its hotels and resorts provide a haven for personal leisure travel, said Clark Albright, former director of sales and marketing for the J.W. Marriott Resort in Las Vegas. “In general, the high-end leisure guests we attract are high-achieving and personally driven individuals in search of a distinctive, innovative, stylish and sophisticated product and experience that parallel their own value system,” he said, adding these individuals expect quality, are willing to pay for luxury services and want to walk away from a vacation with something much more than a relaxing weekend by the pool. “There has absolutely been a shift in the buying psyche of this segment,” he said.
“Where product used to be the sole driver with this clientele in the past, the experience – including the products, services, amenities and activities – a resort provides now drives preference,” he added.
Expensive Toys: Hot Cars
Another hot commodity for millionaires is vehicles that go-go-go – with high five- and even six-digit prices to prove it.
Richard Weisman, CEO of Exotic Cars at Caesars Palace in Las Vegas, sells luxury and exotic brands, including Ferrari, Lamborghini, Bentley, Rolls Royce, Aston Martin, Mercedes, Porsche and Lotus, as well as muscle cars and race cars. Weisman’s location also features more than 10,000 square feet of retail space selling all types of car-related merchandise along with popular interactive experiences, including racing simulators.
Exotic Cars at Caesars is the only authorized U.S. dealer for the Swedish-designed Koenigsegg CCX, a 2,200-pound, 806-horsepower automobile capable of speeds in excess of 250 mph. Weisman said he has already received advance orders for seven of the cars, which retail for more than $650,000. “Where else but Las Vegas would a car dealer sell not one, but seven, vehicles at that price point before they’re even available for a test drive?” remarked Robin Leach.
“There are so many different tastes and reasons why people buy these cars; that’s why there are so many choices available,” Weisman said. Changes in his business are generally dependent on the economy. “The truly wealthy client buys the toys he or she wants regardless of the economy,” he added. “But, when the economy is strong, we pick up buyers who wouldn’t be here otherwise, and those buyers tend to finance or lease.” Speed and luxury are the most important buzz words in Weisman’s business. “For outrageous speed, we sell the Koenigsegg CCX. For outrageous luxury, I show off the Maybach 62, with fully reclining rear seats, electric curtains, self-closing doors, champagne holders and more.”
Many car collectors and hobbyists are active throughout Nevada. Mike McCabe, vice president of leasing for DP Partners in Reno, has been a hobbyist and car collector since the age of 15. McCabe also participates in Hot August Nights in Reno every year, which has grown to be the largest classic car event in the western states. “I drive all of my cars and enjoy tinkering with them myself in the garage. We enjoy driving a couple of Corvettes, a couple of street rods and a 1972 Pontiac Lemans that my wife was driving when we met in college. One of the great things about the classic car hobby today is that many of the hot rod and custom car events are held for charitable causes and sponsored by non-profit organizations.”
Homes, cars and travel are only some of the items and services being bought everyday by the wealthy in Nevada, where their tremendous purchasing power is making a large impact on the state’s economy. It’s easy to see why it’s not only big business to provide products and services to the highly affluent – it’s good business.