Merrill Lynch hired to market Las Vegas’ Hughes Center

Thursday, June 28, 2001 | 10:58 a.m.

Owners of the Hughes Center office, restaurant and residential complex in midtown Las Vegas have hired a broker to sell the 115-acre development at Flamingo and Paradise roads.

The Rouse Co. announced today that it has retained Merrill Lynch & Co., New York, to seek buyers for the development, which is continuing to be built in phases.

Reports of the sale of the center first surfaced in April, but today's announcement was the first confirmation by the company that a buyer is being sought.

"We feel that, at the right price, it might be appropriate to re-deploy our equity from the Hughes Center, given that development is substantially complete," said Anthony Deering, chairman and chief executive officer of the Columbia, Md.-based Rouse Co., parent of the Howard Hughes Corp.

"We are also evaluating other alternatives, such as the sale of other office or retail assets," Deering said in a statement issued today. "The market will determine which alternative we ultimately pursue."

Deering, Rouse officials and Merrill Lynch managing director Jack Cuneo would not say how much Rouse expects to sell the upscale complex for, but experts say it is worth more than $500 million.

The Hughes Center is a complex of nine buildings containing about 1.1 million square feet of office space. It is anchored by the 17-story, 259,000-square-foot Wells Fargo tower at 3800 Howard Hughes Parkway. In the later stages of development, the complex has added a residential component, the luxury condominium project known as Park Towers; and a row of restaurants.

Two seven-story buildings in what is known as the "3883" site in the center also are under design and would add 300,000 square feet of new Class A office space to the complex.

Charles Moore, a senior associate at the CB Richard Ellis office in Las Vegas, said a number of real estate investment trusts, pension funds and private trusts would be likely buyers for the complex. He expects Merrill Lynch will market the property worldwide.

"It will definitely get national attention and possibly a worldwide campaign," Moore said. "They (Howard Hughes Corp.) have done an outstanding job of developing the property and have brought in the amenities to complement the offices, with the residential element, the hotel component and the restaurant components."

Cuneo confirmed that within two weeks, his office would begin approaching a number of public companies, REITs and private individuals about acquiring the development.

Rouse, which took on the complex when it acquired the Howard Hughes Corp. in 1996, is focused more on retail development nationwide than office properties. It already owns the Fashion Show mall on the Las Vegas Strip, which is undergoing a major expansion, and plans to build a mall in the Summerlin area.

The Howard Hughes Corp. also developed the Summerlin master-planned community.

"I think what they have is an asset that they acquired, it's matured and they've done well with in and it still has a great deal of up side, so the timing may be right to move out of the office side," Cuneo said.

Robert Minutoli, senior vice president and director of new business for the Rouse Co., said it's possible that Las Vegas investors may consider acquiring the property. He also said Stoltz Bros Ltd., which Rouse already has a partnership with on other Howard Hughes commercial properties in Las Vegas, could be interested in the Hughes Center.

Minutoli said the company "hopes to have a pretty good understanding" of whether a buyer would be found by September.