Mammoth Equities Buys, Flips Park to TIC

LAS VEGAS-A subsidiary of the Mission Viejo, CA-based investment bank Mammoth Equities has acquired and flipped a 274,000-sf multi-tenant office and industrial park here named the Bella Office and Warehouse Plaza. Constructed in three phases with completion in 2002, the property is currently 93% leased with 101 tenants ranging in size from 1,202 sf to 7,804 sf.The seller was Las Vegas-based developer Jim Donofrio. The asking price for the 14.6-acre development located one mile east of McCarran International Airport was just under $24 million. Mammoth Equities Capital Group paid $23.5 million for the park, and then turned around and sold it to a tenant-in-common partnership for $28.2 million. Mammoth Equities is now the asset manager.Mammoth Equities Capital Group president Russ Colvin tells GlobeSt.com that rents at the park–in the $0.50s per sf per month for warehouse and $0.80s to $1.10 for office space–are approximately 20% below market and will be raised over the next year. There is currently a waiting list for the park’s industrial space, says Colvin, adding that most of the park’s tenants paid for their own tenant improvements and are on short-term leases.Colvin says the spread between Mammoth’s purchase price and that of the TIC covers the company’s transactional fees, fundraising costs (including broker commissions) and planned upgrades to the property. Upgrades include 234 new covered parking spaces, new signage, common-area improvements, new landscaping and new exterior paint. The TIC is planning a three- to five-year hold of the Pecos Road property. Colvin says the first-year IRR average will be about 8.7%. At the asking price, the annual capitalization rate on the property at existing rents is $7.4%, and 11.9% with the raised rents.Donofrio was represented in the transaction by Al Barbagallo, a broker and senior vice president with Grubb & Ellis in Las Vegas. Mammoth Equities represented itself in the transaction.