Las Vegas Is CapRock’s New Target Market
The firm has broken ground on its first development outside of California, a 700,000-square-foot industrial facility.
“Las Vegas is a developer-friendly market, and our experience processing plans and obtaining approvals is often easier in Las Vegas than in California,” Taylor Arnett, VP of acquisitions at CapRock, tells GlobeSt.com. “CapRock’s strategy is to identify and secure well-located properties in a variety of submarkets within the Las Vegas Valley, and develop projects uniquely tailored to each site based on the needs and opportunities within the specific markets. In general, the demand for small tenant buildings can be found in the Southwest and Henderson submarkets while the larger tenants are in North Las Vegas.”
The firm first identified the potential in Las Vegas back in 2016. After research and due diligence, it began actively looking for opportunities in 2018. “CapRock was ready to dive into Las Vegas development in 2018 and we began aggressively seeking land for industrial development,” says Arnett. “We successfully tied up an extremely well located property in North Las Vegas that offers unparalleled freeway frontage and access. Consistent with CapRock’s development approach, our team hired the best local consultants for the development and found the entitlement and design process to be fluid.”
The Interchange Industrial Center is a perfect example of the firm’s plans for the market. “The nearly 700,000-square-foot project is located in North Las Vegas fronting both the I-15 and I-215 freeways and can accommodate big box users by offering immediate interstate freeway access, 36-foot clear building height, cross dock loading and 115 trailer parking stalls,” says Arnett.
While Las Vegas is a middle-market, it has similar challenges to Los Angeles—namely the limited developable land for industrial facilities. “The Las Vegas industrial market actually has very little available land for development because more than 90% of the land in Nevada is government owned,” says Arnett. “The result is that the Las Vegas industrial market behaves more like infill markets such as Los Angeles and Orange County, and less like Phoenix, where there is more available land. Similar to Southern California, sizable industrial land is in high demand and land prices have risen substantially in recent years, and developers are willing to build on a speculative basis due to strong historical absorption.”
The challenges won’t stop CapRock. It has a handful of projects in early development stages, acquired through off-market deals. “CapRock Partners doesn’t have specific goals for land development as we don’t want to put ourselves in a position where we ‘need to buy land,’” adds Arnett. “The company is well capitalized, which helps us to be proactive in securing land opportunities where we can implement our entrepreneurial strategic approach and deliver well-designed industrial buildings that fill a gap in the new supply and meet the demand from tenants.”