Once-prominent Las Vegas office park is for sale amid high vacancies
The Hughes Center office park is up for sale after the once-prominent Las Vegas property lost tenants to newer buildings in the suburbs and was put into court-ordered receivership.
Brokerage firm CBRE Group — one of several firms that moved out of the Hughes Center in recent years — announced Wednesday it was hired to find a buyer for the office park. It said the property, located off Flamingo Road a mile east of the Strip, was coming to market as part of a receiver-facilitated sale.
The offering includes 55 acres with nearly 1.5 million square feet of office and retail space, the firm said.
No asking price was given.
Listing broker Michael Parks, a hotel-casino specialist with CBRE who has worked on numerous deals on and near the Strip, said in an interview that he thinks the property will sell for around $200 million to $250 million and that his team is casting a wide net to find a buyer, from office landlords to hotel and mixed-use developers.
He also cited the potential to redevelop the site.
There is still demand for office space in that area of Las Vegas, including firms that want to be close to the Strip and the Las Vegas Convention Center, but the Hughes Center probably doesn’t need all of the offices it has, Parks said.
According to CBRE, the Hughes Center’s current vacancy rate is 55 percent.
In the office market overall, Southern Nevada’s direct vacancy rate in the third quarter was 12.5 percent, CBRE reported.
Court action
CBRE broker Michael Hsu, an office specialist who is also working on the sales effort, said that the Hughes Center has high-quality space and that a buyer could land the property at a “significant discount” to what it would cost to build the place from scratch.
Parks’ estimated sales price is also well below what the Hughes Center last sold for, more than a decade ago.
New York investment giant Blackstone acquired the Hughes Center in 2013 for $347 million. But by 2023, the landlord had reportedly stopped making payments on its $325 million loan for the property, and then last year, District Judge Susan Johnson appointed a receiver to take control of the office park.
The receiver, Logic Commercial Real Estate, was given authority to sell the property, court records show.
Unlike other cities, Las Vegas doesn’t have a traditional big downtown office market — its skyline is filled with towering hotel-casinos. But for many years, the Hughes Center was widely viewed as Las Vegas’ premier office district and was packed with lawyers, accountants, commercial real estate brokers and other white-collar workers.
In 2004, then-owner Crescent Real Estate Equities Co. reported that the Hughes Center was 94 percent leased, saying it was Las Vegas’ “preeminent office address.”
Moving to the burbs
The Hughes Center is centrally located in the valley. But workers there must deal with heavy traffic around the area, given its proximity to the Strip, UNLV, Harry Reid International Airport and other big sites, slowing their commutes.
And when developers put up high-end office buildings in less-congested areas of the valley in recent years, with coffee shops, eateries and other amenities right nearby, if not just steps away, tenants in the Hughes Center started moving to the new digs.
In 2018, for instance, law firm Greenberg Traurig left the Hughes Center for a new office building near Red Rock Resort in the Summerlin community. More recently, PwC moved this year to the office building in the middle of Downtown Summerlin’s open-air mall — after the accounting giant spent three decades in the Hughes Center.
Other firms left the Hughes Center for the southwest valley.
Commercial real estate brokerage Colliers International said in early 2023 that it had moved to Narrative, a new office building just south of the 215 Beltway between Buffalo and Durango drives. The firm said it had spent nearly two decades in its previous office.
Moreover, several former Hughes Center tenants — including commercial real estate brokerage Newmark Group, financial-services giant Morgan Stanley and accounting firms Deloitte and EY — all moved to UnCommons, a big mixed-use development near Narrative that features offices, apartments and food-and-beverage spots.
Developer Matter Real Estate Group broke ground on the project in summer 2020. Soon after, it announced UnCommons’ first confirmed office tenant: CBRE.
Matter partner Jim Stuart used to work in the Hughes Center decades ago and has fond memories of it, saying the office park was an iconic location.
He noted the Hughes Center was built in a convenient location, but he also pointed out that it was developed before the 215 Beltway opened.
All told, the majority of UnCommons’ office tenants moved there from the Hughes Center, said Stuart, who wonders what will eventually happen to the office park.
“That’s much more of a mystery to me than perhaps identifying what it was,” he said.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.
