Las Vegas Commercial Real Estate Wrap-Up – September 2020

Gallery Tower, Downtown Grand Hotel & Casino. Image courtesy of CIM Group

While the global health crisis continues to unfold, Nevada recorded a sizeable hike of 54 percent in the average number of new COVID-19 cases in the last two weeks of September, The New York Times reported. Even as its hospitality-driven economy bore the brunt of the pandemic, the Las Vegas commercial real estate market saw several major moves last month. While some investors hedged their bets on safe, in-demand assets such as industrial properties, others focused on the hospitality sector’s eventual comeback. Check out our September selection of Las Vegas must-knows:

1. FINANCING – Caesars Entertainment lands $400 million loan.

VICI Properties originated the large financing package, which encumbers the 500,000-square-foot Caesars Forum Convention Center. The five-year note has an initial interest rate of 7.7 percent and is pre-payable in the third year. The lender financed the mortgage with cash on hand. Delivered earlier this year, the property is located at 3911 Koval Lane.

2. DEAL – Black Creek Group acquires two industrial assets.

Panattoni Development Co. sold South 15 Airport Center buildings C and D for $32.5 million, Yardi Matrix shows. The two buildings, which were completed this year, total 266,560 square feet and are located at 1720 and 1725 Chaparral Road. In 2019, the seller and developer funded both projects with a $17.8 million construction loan from JP Morgan Chase.

3. DEVELOPMENT – CIM Group opens 495-key downtown hotel addition.

The developer delivered Gallery Tower, Downtown Grand Hotel & Casino, a 250,000-square-foot, eight-story building. The asset is the first ground-up hotel to rise in the city center in more than a decade. The company broke ground on the project in January 2019. The addition is the third building part of the Downtown Grand complex, which encompasses a total of 1,124 rooms. The property is located at 206 N. Third St.

4. DEAL – RREEF joint venture pays $88.5 million for fully leased warehouse.

In partnership with DWS Group, the company acquired Tropical Distribution Center 2, a 715,000-square-foot industrial property. Massachusetts Mutual Life Insurance Co. financed the acquisition, public records show. VanTrust Real Estate, which also developed the facility, sold the asset. Located on 39 acres at 6260 E. Ann Road, the building was delivered in May 2019 and serves as a distribution center for Sephora.

5. DEVELOPMENT – Harsch Investment Properties kicks off industrial project.

The company started work on Tropical Speedway Commerce Center, a 150,000-square-foot facility. R&O Construction serves as the general contractor. The developer has also tapped VLMK Engineering + Design and VTN Consulting Engineers on the project, which is slated for completion next year. The property will have eight grade-level and 36 dock-high doors. JLL will be in charge of leasing.

6. LEASING – CBRE signs full-floor lease at upcoming development.

The company is set to relocate to a 20,000-square-foot space at UnCommons, a 40-acre mixed-use project with an estimated cost of $400 million. CBRE is slated to move its regional office in the first quarter of 2022, when the campus is scheduled for completion. Located at the intersection of Durango Drive and the 215 Beltway, the property will include five office buildings.