LAS VEGAS-Equity Office Properties, a wholly-owned subsidiary of Blackstone, has invested $347 million on the acquisition of Hughes Center by Blackstone Real Estate Partners VII. Hughes Center, a master planned office campus, includes 1.4 million square feet of class A office space, several restaurants and three undeveloped parcels. Information on the selling entity is undisclosed.
The investment marks the continuation of Blackstone's strategy to acquire high quality assets in select submarkets. Equity Office, a wholly-owned affiliate of Blackstone, will handle management operations and oversee leasing for Hughes Center. The transaction represents a significant foray into the Las Vegas market by Blackstone.
“We see this as a tremendous opportunity to add value, both from a market entry standpoint and with our commitment to operate these buildings at the same high level as the balance of the Equity Office portfolio,” said Frank Campbell, managing director, Southern California for Equity Office. Equity Office will retain the onsite staff in order to provide a seamless transition.
“This acquisition is supported by the financial strength of Blackstone which will position the real estate to perform well as the market improves,” added Campbell. The Las Vegas market has shown improvement in office sector job growth and declining office vacancy rates, according to a Q2 2013 Colliers International research report.
Hughes Center is a 68-acre master planned development that represents the foremost business address in Las Vegas, located along Howard Hughes Parkway between Flamingo Road and Sands Avenue. Hughes Center is home to several major tenants, including Gordon Silver, Ameristar, Wells Fargo Bank, Venetian, Boyd Gaming, Snell & Wilmer, and Lewis and Roca, LLP. The project also includes several restaurants: Del Frisco's, Lawry's Prime Rib, Fogo de Chao, Bahama Breeze, Gordon Biersch Brewery and McCormick & Schmick. A new Starbucks is under construction.
“This portfolio offers an excellent option for the office space needs of our customers, backed by the professional operating platform they have come to expect from Equity Office,” added Campbell.
The seller was represented by HFF, led by the team of executive managing director Mark Gibson, executive managing director Scott Galloway and senior managing director Dan Cashdan. Blackstone was self-represented in the transaction.
Colliers International, which handled leasing for Hughes Center prior to the transaction, will be retained by Equity Office.
The Equity Office portfolio, with more than 70 million square feet of class A office space throughout the U.S., is rich with signature properties in the nation's leading gateway markets. Equity Office focuses heavily on meeting the current trends and changing strategic needs of companies and chosen markets.
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