LAS VEGAS-Centra Properties is selling its crown jewel, Centra Point, to Washington Capital Management, for approximately $130 million. Centra Properties is a prolific local developer. Washington Capital is a Seattle-based manager of labor union-sponsored, multi-employer pension funds, formally known as Taft-Hartley pension funds.
Located at the northeast corner of Durango Dr. and the I-215 Beltway, the class A office development includes 10 two- and three-story, concrete-and-glass buildings with very little vacancy, a market-leading rental rate of $2.10 per sf per month, and a high-profile list of tenants. WCM, which is acquiring nine of the assets, recently closed on seven of them aggregating 317,398 sf for approximately $97 million for $305 per sf, according to Clark County records.
WCM's Cory Carlson, portfolio manager for the commingled, open-end real estate equities fund that made the acquisition tells GlobeSt.com it will close on the other two before the end of the year. Those buildings had a different lender and “had to be dealt with differently,” says Carlson. The one Centra Point asset WCM will not acquire was sold to another party late last year.
Centra Properties founding partner Jim Stuart could not be reached Friday for comment. In a published interview last fall, which followed a series of other divestitures, including the company's construction division, Stuart said the sales are part of the company's strategy to “make sure we have the resources available to take advantage of a shifting real estate market. We are reorganizing Centra to have cash on hand to be able to solve problems.”
The problems he was speaking of are soaring development costs, including the cost of land and construction, stricter financing requirements and a more drawn out permitting process, which increases carrying costs. Moreover, rental rates are not increasing fast enough to fully offset the extra load.
Centra remains a partner with Turnberry Associates in Town Square, a $750-million, 1.7 million-sf office and retail development at the northwest corner of Las Vegas Blvd. South and the I-15/I-215 Beltway interchange that is nearing completion. The retail component of the project is largely pre-leased.
“The sale of Centra Point gives us a cash infusion to pursue similar mixed-use developments and other opportunities as they arise,” Stuart told the local business weekly.
Bob Watson of Seattle-based R.M. Watson Co. represented the seller in the off-market transaction along with Geoff Cantelo. Tom Stilley of Colliers International represented WCM.
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