Southern Nevada’s industrial market stayed in a holding pattern in the first quarter, according to a new report from an international commercial brokerage.
The sector’s overall local vacancy rate was unchanged compared with recent quarters, at just over 11 percent, said brokerage Avison Young in its Spring 2014 Canada/U.S. Industrial Market Report. Leasing and sales activity continued “at a mild pace” in the quarter, the report added.
But some corners of the market are faring better than others.
Avison Young cited North Las Vegas as a stronger-than-average submarket, where occupancy is rising. North Las Vegas saw the greatest industrial sales volume of any local submarket, as well as the third-biggest number of leases, in the last year. In all, the submarket reported 160 transactions in the last 12 months. The boom in sales and leases could push up rents and ultimately encourage new speculative industrial buildings in the city, the report said.
Valleywide, leasing activity points to the city’s mini building boom. Most industrial leases in the last year were for spaces of less than 20,000 square feet, and many of those deals were for companies in residential construction, retail expansion and building activity on the Strip.
Avison Young’s report also touched on the major industrial issue du jour: The scarcity of industrial buildings bigger than 100,000 square feet. Just a “handful” of large industrial buildings were sold or leased in the last year. The problem going forward, the report said, was not how many bigger buildings the market needs, but where to place those warehouses and plants given “the severe lack of available land.”
• Las Vegas has remained a hot market for apartment investors, with two big deals closing in recent weeks.
Doug Schuster, Curt Allsop, Vittal Ram and Kara Walker of Newmark Grubb Knight Frank represented local apartment developer Calida Group in its $26 million sale of Elysian Parc, a 164-unit complex at 1651 American Pacific Drive.
The sale price works out to more than $158,000 per door.
The buyer was San Francisco-based Hamilton Zanze, a 13-year-old real estate investment firm with a 10-state apartment portfolio worth more than $1.5 billion.
Hamilton Zanze targets Western properties ranging from Texas to Washington, and focuses on buying garden-style, Class B apartments that are “1980s vintage or newer” in infill areas.
Elysian Parc was built in 2013, according to the Clark County Assessor.
Hamilton Zanze says it concentrates on markets with economic diversification, “identifiable” job growth, job creators and quality of life.
The firm owned 772 units in four Las Vegas properties, and 176 units in one Reno complex, as of 2013.
Brokers with NAI Vegas’ Sauter Multifamily Group also oversaw a big sale.
The team helped arrange the $10.6 million purchase of the 193-unit Brookstone Apartments at 1401 N. Lamb Blvd.
Brookstone Apartments LLC was the seller in the deal, which came in at almost $55,000 per unit. The buyer was Masuda Family Trust, a private trust based in California.
• An Irvine, Calif., investment firm that focuses on turning around struggling industrial properties has bought a big industrial building in southeast Las Vegas.
BKM Capital Partners spent $15.1 million on the 223,009-square-foot building at 2875 Patrick Lane.
Dan Doherty, SIOR, Spencer Pinter, Chris Lane and Jerry Doty of Colliers International represented the seller, PFRS Patrick Center Corp.
It’s not BKM’s first investment here: The company also owns North Las Vegas’ Cheyenne Technology Center, which it bought out of foreclosure from Bank of America and has revived with a new management team, updated landscaping, fresh paint and additional capital for building out spaces.
BKM says it specializes in buying functionally obsolete, capital-deficient, over-leveraged, high-vacancy properties and adding value through repositioning. Its markets include cities in California, Arizona, Nevada, Washington, Oregon and Utah.
• Local brokers handled several sizable land sales and building leases in recent weeks.
Ben Millis and Chris Beets of Newmark Grubb Knight Frank represented Cohen 2006 Trust in its $3.3 million sale of 19 acres of land at Cheyenne Avenue and North Fifth Street. Susan Borst, CCIM, Dan Doherty, SIOR, Chris Lane and Jerry Doty of Colliers International represented buyer Mendenhall Dynasty Trust 2012.
Colliers International’s Taber Thill, SIOR, represented tenant Desert Valley Therapy in its $1.1 million lease of 6,301 square feet of office space at 7455 W. Washington Ave., inside Longford Medical Center. The deal’s length was not disclosed.
Chris Godino and David Lipp of Newmark Grubb Knight Frank represented landlord S. Larson Family LP in its 60-month lease of 3,177 square feet of retail space at 3481 S. Durango Drive. Johanna Smith of Newmarket Advisors represented tenant First Cup Las Vegas Spring Mountain &Durango LLC in the $343,116 deal.
Godino and Lipp also represented landlord Weingarten Nostat in its 84-month lease of 2,975 square feet of retail space at 3240 S. Eastern Ave. Arlene Williams of Vanquish Realty represented tenant Red Entertainment Worldwide LLC dba Hookah Lounge in the $341,917 agreement.
Contact reporter Jennifer Robison at email@example.com or 702-380-4512. Follow @J_Robison1 on Twitter.