(Read more on the industrial market.)
LAS VEGAS-Within a few months of opening the 523,000-sf second phase of Speedway Commerce Center in North Las Vegas, Harsch Investment Properties is well down the road toward phase three. The Portland, OR-based real estate investment company recently acquired a 50% stake in 35 acres across the street with plans for a 480,000-sf, 11-building flex-industrial complex called Speedway Commerce Center West that would take its Las Vegas Valley portfolio to approximately eight million sf.
Harsch Investment Properties regional SVP Ed Borst tells GlobeSt.com the $70-million expansion is scheduled to get under way in spring 2008 at the northwest corner of Hollywood Boulevard and Azure Avenue, across the street from the first two phases. The first of three phases is scheduled to open by early 2009, the final phase by the end of 2010.
Harsch acquired its 50% stake in the property in August for $6.94 million. Its joint venture partner is the owner of the other 50%, the Gubler Family Trust, which is controlled by James and John Gubler and has owned the land for 30 years. Harsch and the Gublers were of like mind on the deal in that they both want "a long-term investment that will produce cash flow," Borst says.
The initial phase will consist of five tilt-wall buildings ranging from 50,000 sf to 75,000 sf. The buildings will have 26-foot clear heights, grade and dock-high doors and be divisible into 5,000-sf to 16,000-sf units. Buildings will be delivered with drywall, sprinklers and office space, which Harsch says has helped lease up buildings faster than offering a tenant improvement allowance. Blended triple net lease rates will be no less than that for the just completed second phase, which range from $0.72 to $0.78 per sf per month for smaller spaces and from $0.60 to $0.65 for larger spaces.
The offerings at Speedway Commerce Center West are meant to complement what currently exists across the street. "What we did was inventory the existing 1.5 million sf," he says. "We looked at the size of spaces, vacancies, spaces with waiting lists, and then rather unscientifically determined what would work best with our existing product based on what has proven to be popular."
Harsch is moving ahead with the expansion as soon as possible because "there is virtually no vacancy in Speedway Commerce Center," Borst says.
Sixteen miles away in the southeast corner of the Las Vegas Valley, Harsch also is expanding Henderson Commerce Center IV, a 360,000-sf park in the City of Henderson. The center is located at the southeast corner of Eastgate and Warm Springs roads, adjacent to the Auto Show Drive exit.
Harsch's expansion of that property, which was set to get under way this summer, will consist of 241,000 sf in five new buildings with 20-foot to 24-foot clear heights ranging from 34,000 sf to 70,000 sf. Anywhere from 26% to 40% of the space in each building will be built out as office space. The first phase consisted mostly of mid-bay and distribution product.
Harsch also is growing by acquiring existing product. In January, it paid approximately $60 million for Diablo Industrial Center, a 500,000-sf multi-tenant park developed in the latter half of the 1990s at Russell Road and Arville Street, across Interstate 15 from McCarran International Airport. The property was 100% leased to 32 tenants at the time of acquisition.
Harsch's other industrial properties in Las Vegas include Cheyenne Commerce Center and Craig Commerce Center in North Las Vegas, and Desert Inn Commerce Center, Eastern Commerce Center and Location Commerce Center in Clark County.
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