Developer sells six Las Vegas shopping centers for $300 million

Retail developer Territory Inc. sold all six of its shopping centers in Las Vegas to an Illinois real estate investment trust for nearly $300 million, the company's chief executive confirmed Friday.

Territory has developed more than 3 million square feet of retail space in Nevada, including Centennial Center in northwest Las Vegas and Eastern Beltway Center at the Beltway and Eastern Avenue.

Territory Chief Executive Officer Terri Sturm said the "timing was good" to sell the retail properties. Under a confidentiality agreement, she couldn't discuss details of the transaction that closed in late December. The buyer is Inland Diversified Real Estate Trust.

The properties were not distressed or part of the wave of commercial mortgage defaults that have plagued retail centers such as Town Square and The District at Green Valley Ranch, Sturm said.

"Our properties were in good shape, about 96 percent occupied," she said. "It was good timing for a lot of reasons I can't go into."

Territory, founded in 1993, built a track record of developing "power" centers anchored by national tenants such as Wal-Mart, Home Depot, OfficeMax and Petco.

Other Territory properties include Cannery Corner in North Las Vegas, Eastgate in Henderson, Lowe's Plaza on Craig Road and Centennial Gateway in the northwest valley. The company developed the first phase of Southern Highlands Marketplace in the Southern Highlands community, and maintains an ownership stake in Newpark Town Center in Park City, Utah.

Sturm, who returned Friday from a holiday stay in Utah, said she has a lot of partners and a lot of debt, so she doesn't plan on retiring with proceeds from the sale.

"I'm still working at my desk," she said. "We're not doing anything new, just the same old properties."

Territory's services include leasing and property management.

Oak Brook, Ill.-based Inland Diversified is a public REIT focused on acquiring and developing commercial real estate in the United States and Canada, and acquiring other REITs or real estate operating companies. Earlier in December, Inland acquired The Landings at Ocean Isle Beach in North Carolina for $10.2 million.

"We feel that this portfolio offers a strong mix of anchor tenants in key demographic areas in Las Vegas," Inland Real Estate Acquisitions Senior Vice President Lou Quilici said in a statement announcing the Territory acquisition.

The sale is good news for Southern Nevada's economy, said Jeremy Aguero, principal of business advisory firm Applied Analysis.

"It means investors are bringing in new capital to the market," he said. "We hear more and more about large-scale investors coming back to Las Vegas, both on and off the Strip."

Aguero noted that retail sales in Southern Nevada have increased 7 percent in the last 12 months, compared with population growth of about 1 percent and income growth of less than 2 percent. Spending has increased in restaurants and bars, new car sales, clothing and durable goods.

"A lot of that retail spending has led the way out of the recession," Aguero said. "A lot of excess vacancy is from spending levels of 2007. I'm not suggesting we're back to 2007, but I do think well-positioned retail centers are going to see improvement."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.