Southern Nevada’s real estate market may be hot right now, but some areas are hotter than others.
Consider the southwest corner of the Las Vegas Valley, which centers on the Southern Nevada Beltway. It’s only one three-month period, but in the second quarter, the southwest was responsible for 500,000 square feet of the entire market’s 741,000-square-foot industrial absorption, according to numbers from research firm Applied Analysis.
Industrial projects aren’t the only booming developments. Panattoni Development Co. announced in early August that it had closed out sales at its Buffalo/215 Business Park. Among the final buyers: Desert Kitchens LLC, which bought a 6,150-square-foot building at 7693 W. Post Road for $319,800; mortgage company Kickjab, which bought 6,150 square feet of space at 7711 W. Post Road, also for $319,800; and Buffalo Post LLC, which bought an acre of land for $168,980.
“These transactions serve to demonstrate the renewed interest we’re seeing in the southwest Las Vegas submarket,” said Doug Roberts, a partner in Panattoni’s Nevada division.
That interest isn’t at Buffalo/215 alone. Panattoni is also building a 130,000-square-foot headquarters at Jones Boulevard and the beltway for gaming-equipment provider SHFL Entertainment. Electronics recycler and distributor U.S. Micro announced its opening in early 2012 of a 130,000-square-foot headquarters near Sunset Road and Buffalo. And the once-halted Red Rock Business Center near Russell Road and the beltway has a new owner in WGH Acquisitions, which has upgraded the property and is actively leasing space after a four-year hibernation.
So what makes the southwest submarket so popular? Part of it is simple location. With the beltway running through its core, the market is within a few minutes of Interstate 15 and McCarran International Airport. That makes it the ideal spot for big companies that need to distribute products, said Brian Gordon, a principal with Applied Analysis. Plus, the sector’s vast tracts of empty land mean plenty of options for big users who need expansive acreage, Gordon said.
Development in the area is also getting an assist from the opening of McCarran’s common management area, a 5,000-acre tract that was off-limits to much new construction until earlier this year, when airport officials decided quieter modern-day planes would make offices and homes in the flight path more feasible.
A pickup in residential activity should help, too, Gordon said. The stalled Manhattan West condo project, now rebranded The Gramercy, is back underway, with occupancy set for May. Sales are also picking up in other residential communities such as Mountain’s Edge, thanks to a reset on high pre-recession prices, Gordon said. And where rooftops mushroom, office and retail spaces follow.
Still, it’s always important to put today’s recent gains in a bigger context. So consider that commercial vacancy rates are still well above running averages. More than 16 percent of industrial buildings marketwide and in the southwest are empty, compared with a 10 percent average vacancy rate over the last 10 years, Gordon said.
But don’t count out the southwest in the long term.
“We’re likely to see a greater share of development activity going forward, simply as a function of supply and demand,” Gordon said. “Where other submarkets tend to be fairly well built out, the southwest has availability of property.”
■ Marcus & Millichap Real Estate Investment Services brokered the $2.24 million sale of a 30,934-square-foot retail property at 3121 N. Rancho Drive. Investment specialist Ray Germain listed the property on behalf of the seller, which Clark County property records showed as JG Rancho LLC. The property, which Gold Star Venture LLC of Cerritos, Calif., bought, is leased to thrift chain Savers, which has six stores across Southern Nevada. Germain said the site’s visible location at Rancho and Cheyenne Avenue, its tenant history, ongoing cash flow and below-market rental rate brought in multiple offers above list price.
■ Brokers with Colliers International closed on several deals in recent weeks.
Spencer Pinter, Dan Doherty, SIOR, and Chris Lane represented landlord KTR LV IV LLC in its lease of 11,457 square feet of industrial space to the federal government. The 120-month lease, valued at $2.8 million, is inside the Arrowhead Commerce Center at 3595 E. Patrick Lane.
Also inside Arrowhead, Pinter, Doherty and Lane arranged a 60-month lease with a value of $1.86 million to OSA West. The 56,725-square-foot industrial property is at 6275 S. Sandhill Road.
Eric Molfetta and Dean Willmore, SIOR, brokered the sale of a 22,689-square-foot industrial property at 1535 Pama Lane. Oro Pama LLC sold the space to HLM Montague Property LLC for $2 million. Spencer Pinter represented the buyer.
Contact reporter Jennifer Robison at email@example.com or 702-380-4512. Follow @J_Robison1 on Twitter.