Demand up for Southwest, downtown Vegas offices

Monday, Oct. 9, 2000 | 11:13 a.m.

Southwest Las Vegas will be the next hot spot for office and industrial property development, local real estate experts say.

The continued development of property around the southern Beltway will generate increased interest in locating offices there, Colliers International Vice President Tom Stilley said Friday at a "virtual bus tour" organized by the Southern Nevada Chapter of the National Association of Industrial and Office Properties.

NAIOP experimented with a computer-generated program summarizing available properties and their locations instead of taking members on a bus tour around the valley as it has done in the past. Two panels of three experts each dissected the office and industrial markets for the gathering of about 300 people.

Stilley explained that residential development is pushing south from Summerlin, making the Beltway's path between there and Green Valley more appealing to businesses that want to have their employees within easy commuting distance.

Stilley said most commercial developers are looking at that area being the next major center of growth, probably three to five years away.

The rapid growth of the population in Summerlin and Green Valley is also fueling optimism about the development of downtown Las Vegas as well. Stilley explained that companies that have clients in both the southern and northwestern population centers may choose to split the difference in distance and place an office downtown to serve both.

On the industrial property front, Kevin Higgins, a vice president with CB Richard Ellis Inc. in Las Vegas, warned that climbing lease rates -- spurred by higher land costs -- could put Las Vegas at a competitive disadvantage against other cities vying to attract companies to locate their warehouses and distribution centers in the city.

Dean Willmore of GVA Industrial Property Group explained that the industrial parks near McCarran International Airport and in areas west of Interstate 15 and south of Charleston Boulevard are commanding prices of around 32 cents per square foot annually -- slightly higher than properties in Reno, Phoenix, Salt Lake City and Ontario, Calif.

Meanwhile, North Las Vegas industrial properties are less expensive and more competitive, though slightly farther away from the Las Vegas Strip. Many companies want to be closer to the Strip because they are suppliers or vendors to businesses that operate in the resort corridor, including convention warehousing and suppliers.

Willmore said industrial properties for warehousing and distribution should continue to be hot along I-15 north to the Las Vegas Motor Speedway as well as in the southwest part of the city, which is opening up as Bureau of Land Management property west of McCarran International Airport is auctioned to developers.

Panelists also said within five years a new industrial market will be on the radar screen for Southern Nevada -- in the vicinity of a proposed new airport about 30 miles south of Las Vegas.

Clark County aviation officials have begun working on acquiring land for a new airport in the Ivanpah Valley.

Panelists also addressed a question recently posed by the Wall Street Journal: Is Las Vegas overbuilt? Panelist Chuck Witters said Las Vegas has been accused of being overbuilt for years and the rapid growth always seems to justify the speculative construction, he said.

"I'd say it's just B.S.," said Witters, a broker with Lee & Associates.

Most of Friday's "virtual tour," sponsored by Wells Fargo Bank and XO Communications (formerly Nextlink), detailed the inventory of office and industrial project recently completed or near completion, listing each project's developer.

At the center of the expansion of office projects in southwest Las Vegas are the Thomas & Mack Development Co.'s McCarran Center, 11 separate buildings in various stages of development.

Another major player in the southern end of the valley is American Nevada Corp., which has eight properties, including the Green Valley Corporate Center at the Beltway and Green Valley Parkway, and the 600-employee Ford Credit facility. American Nevada is owned by the Greenspun family, which also owns the Las Vegas Sun.

The Howard Hughes Corp., a subsidiary of the Rouse Co., is developing upscale offices on West Charleston Boulevard at Summerlin. Corporate Pointe includes three new buildings joining the company's current corporate headquarters. The company also is more than half leased on Building 3993 in the Hughes Center near Flamingo Road and Maryland Parkway and has leased a large portion of Hughes Airport Center Building 50 to Las Vegas-based National Airlines.

Panelists also were enthused about plans for City Centre Place, a six-story, 113,000-square-foot downtown office building being developed by the Pauls Corp., Denver, at 400 S. Fourth St. It's just down the block from a multimillion-dollar remodeling project at Bank of America Plaza.

Stilley said Bank of America Plaza, managed by Irwin Molasky, would focus on multitenant use -- professional offices, law firms, financial services companies and government-use offices.

Stilley said the Bank Plaza, a 17-story structure, would not compete directly with the Pauls Corp.'s project, which is expected to focus on larger tenants, including high-tech and telecommunications clients.