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Beltway business boom
Gaming companies move offices southwest for convenience, space
March 05, 2008 - Crown Ltd. is the latest in a handful of gaming
companies that have purchased or leased office space along the Las Vegas Beltway
in the southwestern Las Vegas Valley, creating a core development totaling about
1 million square feet.
Crown, controlled by Australian billionaire James Packer, has committed to
taking 5,000 square feet at LaPour Corporate Center near Russell Road and the
Beltway. The company invested more than $400 million in Las Vegas with minority
stakes in Harrah's Entertainment and Station Casinos, and plans to build a
resort on the former Wet 'n Wild site.
Las Vegas-based Boyd Gaming Corp. bought a four-story, 110,000-square-foot
office building at Rainbow Sunset Pavilion, a 25-acre retail and office
development by Plise Cos. on Rainbow Boulevard, a half-mile from the Beltway.
Station Casinos moved its corporate offices from Palace Station on Sahara Avenue
to a new 150,000-square-foot, $18 million building at Red Rock Resort. Wynn
Resorts took 12,000 square feet of office space at Centra Point.
Golden Gaming, which operates casinos throughout Nevada and Colorado and all
PT's pubs, built its corporate office at the Beltway and Jones Boulevard.
Pinnacle Entertainment and Cannery Casino Resorts also have offices in the
southwest valley.
CB Richard Ellis office broker Jayne Cayton said she remembers seeing Golden
Gaming's building on a bus tour of office development a couple years ago and
nobody knew what it was.
"It was in the middle of nowhere. There was nothing around it," she said.
Back-office operations such as accounting, marketing, and research and
development were often housed on casino property. But the dynamics of Strip real
estate today dictate that almost every square foot be used to generate revenue,
developer Jeff LaPour said.
Land values on the Strip are about $20 million an acre, a fourth-quarter report
from Applied Analysis, a Las Vegas financial consultancy, shows.
The southern Beltway provides easy access to the Strip and McCarran
International Airport, LaPour said. Many gaming executives also live in the
area, he added.
"Nobody wants to deal with the congestion on the Strip," he said. "What's cool
is that gaming is our computer industry. I think it's kind of exciting to see
them cluster along the Beltway."
The southwest office submarket has nearly 6.8 million square feet of office
inventory with a 17.3 percent vacancy rate, higher than the 12.5 percent overall
vacancy, Salt Lake City-based real estate brokerage services company Commerce
CRG reported in its year-end market overview. Another 2 million square feet are
under construction.
Reno-based slot manufacturer International Game Technology is building a
600,000-square-foot facility at Buffalo Drive and Sunset Road, consolidating
from nine buildings the company now occupies in Las Vegas.
The 12-acre campus consists of 300,000 square feet of manufacturing and
warehouse space, 230,000 square feet for offices and 70,000 square feet of
accessory space. It will house manufacturing, engineering, sales and casino
services.
IGT expanded operations in Southern Nevada with the acquisition of Acres Gaming
and Anchor Gaming and needed to bring various departments under one roof, IGT
spokesman Ed Rogich said.
"At the time, it was one of the few areas where we could accumulate the land,"
he said of the decision to locate along the Beltway.
IGT was leasing 440,000 square feet, including four different offices and
warehouse space for refurbishing games at Hughes Airport Center.
The new facility will employ about 1,000 people, Rogich said.
Average asking rent for office space in the southwest submarket is $2.43 a
square foot a month, Commerce CRG reported. LaPour said he'll be asking about
$2.50 a foot when his three-story, 70,000-square-foot office building opens in
June. The building is LEED (Leadership in Energy and Environmental Design)
certified.
"I think what you're going to see now is a flight to quality," LaPour said.
"Tenants are going to have choices. They're going to pick the highest quality
with the best amenities. You're also seeing the maturing of our office market.
We really didn't have that before."
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