Joint venture will acquire Hughes Center owner

By Steve Green (contact)

Friday, Nov. 20, 2009 | 2:19 p.m.

A big nationwide real estate deal announced today includes the high-end, 115-acre Hughes Center office and business complex in Las Vegas.

Its owner, Crescent Real Estate Equities Limited Partnership of Fort Worth, Texas, has been taken over by Barclays Capital, part of London-based banking giant Barclays Bank Plc.

A Morgan Stanley real estate fund acquired Crescent for $6.5 billion in 2007, at the height of the commercial real estate boom, but then suffered $950 million in losses as the recession hurt the business.

Rather than sustain further losses and cover a $2 billion loan for the deal, which matured through extensions on Nov. 9, the investment bank Morgan Stanley transferred Crescent to Barclays Capital.

Barclays is forgiving the $2 billion loan, Morgan Stanley said.

Barclays formed a joint venture with Goff Capital Inc. to acquire Crescent, the companies announced today.

Crescent owns and manages a portfolio of 36 office buildings totaling 17 million square feet in markets including Dallas, Houston, Denver and Las Vegas.

Barclays also today announced the appointment of John C. Goff as chairman and chief executive officer of Crescent. The appointment marks Goff’s return to Crescent, a firm he formerly led as vice chairman and chief executive until its sale to Morgan Stanley in 2007.

"Given his extensive knowledge of the Crescent portfolio, John is well suited to manage the company going forward," Haejin Baek, managing director, head of Commercial Real Estate Capital Markets at Barclays Capital, said in a statement.

The Hughes Center, at Flamingo and Paradise roads, includes nine office buildings with 1.35 million square feet of space, restaurants, nearby hotels and the Park at Hughes Center -- two 20-story residential condominium towers.

Tom Stilley, a broker with Colliers International who has been leasing space at Hughes Center, said it remains the largest master-planned office park in the area.

The center has maintained its roster of influential tenants such as law firms and corporate headquarters including the headquarters of Boyd Gaming Corp.

The Hughes Center has an occupancy rate of about 87 percent, Stilley said, adding, "It's doing better than the rest of the market."

Office vacancy throughout Las Vegas is about 22 percent, according to Colliers' numbers.

Calls about the deal to the Hughes Center were referred to corporate headquarters in Texas, where a spokeswoman referred calls to Goff Capital. Officials at Goff could not immediately be reached for comment.

The Hughes Center was initially developed by The Howard Hughes Corp. The Rouse Co. purchased Howard Hughes in 1996 and in 2003 Rouse sold the Hughes Center to Crescent for $233 million.

Rouse and the Hughes Corp. -- developer of Summerlin -- were acquired in 2004 by mall owner General Growth Properties.