October 26, 2017 - 10:12 am
California investors have acquired a suburban Las Vegas office park, plowing more money into the growing southwest valley.
PCCP and The Brookhollow Group bought Centra Point, a nine-building, 383,700-square-foot complex on Sunset Road just east of Durango Drive, according to announcements this month.
The $78.3 million sale, by Washington Capital Management, closed Sept. 27, property records show.
Compared to other types of real estate, Las Vegas’ office market has been among the slowest to recover from the recession, given its high, albeit shrinking, vacancy rate.
But the southwest gets more demand for office space than other areas and is perhaps the fastest-growing section of the valley, with housing tracts, apartment complexes, retail centers and other projects popping up.
Still, Centra Point is by no means packed: The property is around 70 percent leased, according to the buyers and brokerage Newmark Knight Frank, which represented the seller.
PCCP Vice President Mike Johnson said in his firm’s Oct. 5 announcement that the new owners “see this as an opportunity to add value through active management, capital improvements, and an aggressive leasing strategy.”
PCCP has offices in Los Angeles, San Francisco and New York. Efforts this week to speak with the firm were unsuccessful.
Jeff Kaplan, a partner with Costa Mesa, California-based Brookhollow, said on Wednesday that his firm has been active in Las Vegas since the late 1980s and owns about 400,000 square feet of other property, mostly industrial buildings, in the area.
He said the office market is “tightening up” and that Centra Point is in a “great location,” between the Summerlin and Green Valley communities.
The new owners are planning $3 million worth of upgrades, not including tenant improvements, he said.
Southern Nevada’s office market had a 16.1 percent vacancy rate in the second quarter, down from 17.6 percent a year earlier. Among submarkets, the southwest had the lowest vacancy rate in the second quarter at 12.6 percent, according to brokerage firm Colliers International.
Centra Point spans about 25 acres, was built between 2004 and 2006, and features seven office buildings and two retail buildings.
Seattle-based Washington Capital Management bought the park when it was fairly new, President and CEO Cory Carlson said on Wednesday.
He, too, said the park is in a great location but that Las Vegas – which developers flooded with office projects during the bubble years last decade – is “oversupplied” with space and “not doing well” overall.
The Seattle-area’s office market, by comparison, has an 8.1 percent vacancy rate, according to Colliers,
Carlson said his firm’s original tenant base at Centra Point was centered on the housing industry, but after the market crashed, many of those companies either reduced their office space or left the market.
His group signed new tenants but was “competing with a pretty significant” vacancy rate valleywide, he said.
Contact Eli Segall at email@example.com or 702-383-0342. Follow @eli_segall on Twitter.