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Nevada Power Builds Out New Operations Center

LAS VEGAS-The subsidiary of Sierra Pacific Corp. will occupy a 288,000-sf building this fall under a 20-year, $79-million lease agreement.

By Brian K. Miller | Updated on March 23, 2008

LAS VEGAS-Nevada Power Co. will consolidate two existing southern operations centers into a new 288,000-sf building at Beltway Business Park this fall. Prior to occupancy, the subsidiary of publicly traded Sierra Pacific Resources of Reno will build out an additional 135,000 sf of mezzanine office space within the building, giving it more than 400,000 sf to use.

Located at 7155 Lindell Rd., the building is owned by Majestic Realty Co. Nevada Power signed a 20-year lease valued at $79 million, according to an SEC filing, which averages out to $1.13 per sf per month. The discount to market rate, which is closer to $1.50 per sf, is due to the size of the lease and the fact that Nevada Power, given its lower cost of capital, leased the building in shell condition and is paying for its own tenant improvements, including the mezzanine office space.

The building sits on 16 acres. The lease includes an additional 16 acres for “operational use.” The cost of the mezzanine space and improvements to the adjacent land, which will include pavement and shade structures and screening walls, will total approximately $50 million over the life of the lease, according to the SEC filing. The lease agreement includes renewal options.

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