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Downtown Vegas Office Building Fetches $72M

LAS VEGAS-IPC US REIT, a Toronto-based public company focused on US real estate, agrees to acquire the 254,000-sf Bank of America Plaza, which at 17 stories is the city's tallest Downtown office building.

By Brian K. Miller | Updated on February 22, 2005

LAS VEGAS-A subsidiary of IPC US REIT is acquiring for $72 million the tallest building in this city’s Downtown, the 17-story, 254,000-sf Bank of America Plaza. It is the first Sin City asset for the Toronto-based REIT focused exclusively on US real estate.The property is 95% leased. Bank of America leases approximately 23% of the building until 2015. Due to the building’s proximity to the new Federal Courthouse, the Clark County Courthouse and the new Regional Justice Center, several law firms also occupy the building.IPC is financing the purchase price with a $50-million, 10-year first mortgage at about 5% provided by Bank of America. IPC president/CEO Vinay Kapoor says the interest rate is the lowest fixed rate the company has ever achieved for a 10-year loan. The balance of the purchase price will be funded through the company’s acquisition line. Company officials say they will pursue partnerships with other investors to participate in the acquisition, generating additional fee income for the REIT. First-year distributable income from the investment will be about $3.2 million (before interest on the acquisition line and non-controlling interest), according to IPC. The return on equity is expected to be over 12%.IPC is the only Canada-based REIT that invest exclusively in US commercial real estate. The company manages and has ownership interests, including this acquisition, ranging from 30% to 100% in 36 properties in the US comprising over 10 million sf of rentable area. In addition, the REIT holds a $51-million preferred equity investment in the Bank of America Center, a 1.8-million-sf office complex in San Francisco’s financial district.

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