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LAS VEGAS-Harsch Investment Properties has acquired the Diablo Industrial Center, a 500,000-sf multi-tenant park here that is fully leased. The privately held real estate owner, developer and manager from Portland, OR paid Diablo Investments LLC $59.87 million for the asset.
Developed in the latter half of the 1990s, Diablo Industrial Center sits on 28 acres at Russell Road and Arville Street, across Interstate 15 from McCarran International Airport. The park is located in one of the largest and strongest industrial submarkets in the city, just three miles from the Las Vegas Strip.
The development is 100% leased to 32 tenants ranging in size from 5,000 sf to 65,000 sf. The triple-net rent is approximately $0.70 per sf per month. Tenants include MGM Grand Resorts Development and MGM Mirage, which also is a tenant in Harsch's Valley View Commerce Center located south of Russell Road on Dean Martin Drive.
The Diablo acquisition was the largest in the Harsch's history, eclipsing the company's $54-million acquisition of the Stephanie Street power Center here in 2003. The acquisition brings the company's Las Vegas portfolio to 7.5 million sf. The portfolio, which includes industrial business parks and retail properties, is overseen by John Ramous, Harsch's vice president and regional operations manager.
The portfolio will grow organically later this year when Harsch breaks ground for an expansion of Henderson Commerce Center IV, currently a 360,000-sf park in the City of Henderson that is 80% leased. The center is located at the southeast corner of Eastgate and Warm Springs roads, adjacent to the Auto Show Drive exit.
Ramous told GlobeSt.com earlier this month that expansion will consist of five new buildings with 20-foot to 24-foot clear heights ranging from 35,000 sf to 60,000 sf. Between 25% and 100% of the space in each building will be built out as office space. The first phase consisted mostly of mid-bay and distribution product. Flex-office vacancy in the Vegas Valley is in mid single digits.
The higher office build-out is in response to market demand and the fact that the area is quickly becoming more of a major corridor, which has pushed much of the pure industrial development to less expensive land in North Las Vegas. The triple-net asking rate for office build-out will be between $1.35 and $1.50 per sf per month. The warehouse rate will range from $0.60 to $0.75 per sf.
The center will be expanded one more time after this, by an additional 230,000 sf, bringing the overall size of the development to 836,000 sf in about a dozen buildings. The final additional is slated for completion in late 2008.
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