(To read more on the industrial market, click here.)
LAS VEGAS-CIP Real Estate of Irvine, CA and Newport Beach, CA-based Buchanan Street Partners have acquired 892,000 sf at Hughes Airport Center in Las Vegas for $145 million in cash and debt. The seller was an affiliate of Stoltz Management Co.
The acquired properties were developed in the late 1980s and early 1990s. They include single-tenant and multi-tenant buildings ranging in size from 32,700 sf to 75,866 sf. Occupancy is about 95%. Some of the buildings' 45 tenants include ClientLogic Corporation, First National Bank, Ikon Office Solutions, Wynn Design & Development, Credit One Bank, KB Homes, Lillian Vernon Corp, Pardee Homes and FCC National Bank.
With this acquisition, the joint venture owns about 1.3 million sf on 83 acres at Hughes Airport Center. In early 2005, CIP and Buchanan Street acquired 420,811 sf of office and industrial buildings at the center, which is located directly off the I-215 and I-15 Freeways, adjacent to McCarran International Airport.
For this latest transaction, the CIP-Buchanan JV put up $30.07 million of equity. For the debt portion, the JV secured a $116-million combination of fixed and floating rate financing for the joint venture from Greenwich Capital, an affiliate of the Royal Bank of Scotland.
The floating rate loan was to finance four buildings and the two land parcels for possible disposition and/or development. The fixed rate loan was placed on the remaining 14 buildings, which Buchanan EVP Tim Hawthorne says will be part of a larger value-add strategy.
CIP principal Chuck McKenna says the acquisition is part of the company's strategy to take advantage of economies of scale and the strong Las Vegas real estate market. Due to population growth in the Las Vegas area, McKenna says these real estate assets are harder and harder to build due to tight land availability and rising land and construction costs.
"These are very nice assets in a location we don't think can be duplicated because of land prices," he tells GlobeSt.com. "There's no way you build this type of product if you have the same parcel today."
The value-add assets--the four buildings and the land secured with the floating rate loan--each has its own story, says McKenna. Generally speaking, however, he says the buildings are value-add plays due to existing or expected vacancy. The land parcels, he says, are currently encumbered by leases for excess parking "that will have to be reworked to free them up for development."
Kevin Higgins of Voit Commercial Brokerage in Las Vegas and Michael Hefner of Voit Commercial Brokerage in Anaheim, CA represented the buyer. The seller was represented by Stoltz Real Estate Services.
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