I-15 widening boosts projects in NLV

By Richard N. Velotta (contact)

Fri, Mar 19, 2010 (3 a.m.)

Dean Willmore

The lengthy construction schedule last year on Interstate 15 north of the Spaghetti Bowl made for miserable motorists and headache-filled commutes.

And, apparently, smaller appetites for industrial real estate deals.

But now that I-15 has been expanded to 10 lanes and most of the construction cones have been removed, things are starting to pick up for at least one real estate professional.

Dean Willmore, senior vice president of Prudential-IPG Commercial Real Estate in Las Vegas, discussed the improvements with colleagues at March 10’s Society of Industrial and Office Realtors lunch at Maggiano’s Little Italy.

“It was absolutely dead last year,” Willmore said. “But the freeway opening up has made all the difference in the world.”

After the meeting, Willmore said that although the slow real estate market has hurt all sectors in Las Vegas, there is no doubt in his mind that things were exacerbated by the I-15 project, which began in summer 2008 and concluded last Christmas Eve.

The interstate was widened from four lanes to 10 from the Spaghetti Bowl to Craig Road.

Willmore and Tom Elkington, a senior adviser with Prudential-IPG, said several companies have found their way to North Las Vegas:

• The Las Vegas office of Aztec Engineering, a Phoenix-based company that has contracts on the Boulder City bypass on U.S. 93 at Hoover Dam.

• Moda Light, a lighting exhibition company that uses light-emitting diode technology and worked on MGM Mirage’s CityCenter as well as MGM Grand Detroit.

• National Ticket Co., a family-owned Paxinos, Pa., ticket printing business that is developing a Las Vegas operation to print show tickets.

• Kwan International, a marketing and public relations firm that has opened an office at the Las Vegas Motor Speedway and specializes in assisting Chinese companies emerging in the United States.

• Amazon Construction, a Las Vegas company specializing in construction and landscaping projects in Southern Nevada.

• Lounge22, a convention services company based in Los Angeles specializing in furniture renting, leasing and sales for convention and trade-show displays. The company recently leased 65,000 square feet at the speedway.

• Canada-based Astound Group, an experiential marketing company that develops convention displays, using Las Vegas as its base of operations for western North America.

Willmore said he expects more industrial clients to consider Las Vegas, particularly furniture, thanks to the emergence of the World Market Center. He cited Foliot, a Montreal-based company that has signed a deal to locate a manufacturing plant in Las Vegas.

Foliot, which specializes in hospitality industry furniture, is opening its new plant in May and has 200 jobs at a 390,000-square-foot warehouse at the Freeman exhibition services building near McCarran International Airport. Freeman moved to a new facility at Sunset Road and Rainbow Boulevard.

Willmore and Elkington said several factors are fueling the increased interest in Southern Nevada.

Shipping rates — always low into Southern Nevada because it is primarily an inbound market with truckers supplying resorts — have been discounted by 70 percent. Willmore said when pressed, some companies are discounting rates by 85 percent.

“Trucking rates have gotten so low that it’s cheaper to ship from Las Vegas to Los Angeles than from other parts of Southern California to Los Angeles,” he said.

The rent decrease on industrial properties of 40 percent to 50 percent makes Las Vegas competitive with other Western cities. Labor costs are down and housing is more affordable.

Throw in low taxes and Southern Nevada has become more competitive to rebounding businesses.

Other highlights from the industrial Realtors’ meeting:

• Professionals say they think several markets have hit bottom in commercial, industrial and office real estate and have begun recoveries, citing big deals in the Midwest, East and Southeast.

• Although business is picking up for many members, agents acknowledged that a low percentage of the deals comes from out-of-town companies moving into the city and that the bulk of the transactions were companies finding better deals in different locations at discounted rates.

• Although the number of new contracts is increasing, the number of availabilities also is climbing. Some Realtors say they expect it would take at least five years for some of the office properties to be absorbed and product built — unless the new offices have extraordinary features unavailable now.