TIAA-CREF Takes 50% Stake in Grand Canal Shoppes; GGP Reaps $410M

By Alex Girda, Associate Editor

A recent recapitalization underscores the appeal of trophy Las Vegas retail properties to institutional investors. TIAA-CREF has acquired a 50 percent stake in the Grand Canal Shoppes, including the Shoppes at Palazzo, from General Growth Properties Inc. The transaction generated approximately $410 million in net proceeds, according to a joint statement issued May 16 by GGP and TIAA-CREF.

Part of the Venetian and Palazzo complex, The Grand Canal Shoppes offers 774,000 square feet of gross leasable area that generates more than $1,000 per square foot. TIAA-CREF’s newly acquired stake involves only the retail component of the complex.

Besides retaining 50 percent ownership, General Growth will continue to serve as the property’s manager and primary leasing agent. Grand Canal Shoppes had a 99 percent occupancy rate at the time the deal closed.

TIAA-CREF’s retail growth strategy focuses primarily on regional properties offering strong revenue streams. Its portfolio, which includes office, retail, industrial and multifamily properties on both sides of the Atlantic, is currently valued at $33 million.

Image courtesy of thegrandcanalshoppes.com

The Right Legislative Moves Could Be Nevada’s Saving Grace

By Alex Girda, Associate Editor

Recent real estate market reports regarding Nevada’s housing situation indicate that the long-awaited recovery could be postponed as average prices have dipped for the last few months. Residents and developers are waiting for a way out of this situation and a serious initiative is now under discussion.

A piece of legislation passed back in 1986 called the Low Income Housing Tax Credit is a national program that aimed at encouraging the development of low-income housing. The law offers tax credit to developers planning to construct low-income housing. According to The Las Vegas Sun, a number of developers have voiced their concerns over the fact that this type of legislation is outdated and needs reworking. Tax credit should be offered to a different type of venture than that of simply constructing new housing units as market oversaturation may be in sight.
The Sun also mentioned that a preferred scenario would be that in which a new legislative initiative would drive developers to already existing residential units. State help would be involved only in the sense of incentives for developers that acquire and rehabilitate homes before turning them into rental units. The supply of homes lost to foreclosure would ensure the project’s starting point.

The housing authority’s response is that it has placed acquisitions and rehabilitations higher on the scale of priority and it is now easier for developers that have this type of project to receive tax credits. Another argument presented by Charles Horsey, the administrator of the housing division who was quoted by The Las Vegas Sun, is that an oversaturation of affordable housing is not as near as its seems. He also said that market rate housing could suffer from that phenomenon while there still is a market for apartment developments aimed at those who can’t afford homes from the current supply.

Providence Clearly a Fan of Parks as Master-Planned Community Unveils Second Public Spot

By Alex Girda, Associate Editor
The Providence master-planned community situated in the northwest part of the valley has recently inaugurated its second park. The community, located at 10695 Dorrell Lane, has now unveiled two parks that will benefit area residents, with another one in the pipeline. The Providence developer, John Ritter was quoted by The Las Vegas Sun as saying that the community is currently benefitting from a move that can’t really be tracked around the rest of Las Vegas.
The park, dubbed Knickerbocker Park, is a $2.2 million investment that includes a host of amenities such as: a splash pad, a youth baseball field, a dog park, two play areas as well as a multiuse events field. Knickerbocker Park followed the Promenade Park, and will in turn be followed by Huckleberry Park. The third, and final, park also calls for funds totaling $2.2 million.
The park was designed to be finalized in phases according to Capital Consultants Management Corp. employee Brandon Exline. Exline acts as Providence HOA community manager and has mentioned the fact that actual completion will take place in January, when the park will add a new jogging path, a 28-foot shade ramada, a flag pole and an exercise station. The 15-acre park was funded by the Providence Master Homeowners Association. The Promenade, a half-mile linear park, was built in 2008 for around $1 million, also obtained from the HOA. The Sun reports that funding for the project came from home sales in the 1,200-acre community.

WinCo to Open Two Las Vegas Stores; Overall Home Sales Have Hit Record Highs in 2011 as New Home Sales Plunged

By Alex Girda, Associate Editor

WinCo Foods is about to open two brand new stores in the Las Vegas area with a tentative opening slated for March of this year. One of the two stores is being rapidly developed at the Stephanie Street and Wigwam Parkway location. The Las Vegas Sun reports that the new stores will open with a number of 150 to 200 employees each.
The Stephanie St. store is being constructed according to plan and will most likely open the 92,000 square feet to customers at the beginning of March. Another WinCo Foods store is set to open in a location at the Las Vegas Beltway and Decatur Boulevard. WinCo Foods handles fresh produce, meats, fish and goods at discount prices.
In other real estate news, statistics indicate that 2011 has set a new record for home sales as 2009’s 46,879 transactions were overtaken during last year’s market. However, the new record, of 48,186 sales is no indication of an improving market. In fact, new home sales have taken a very serious fall from 2006 when 39,000 new homes traded hands. In 2011, only 4,000 deals were perfected for new homes.
2011’s figure is, according to BusinessInsider.com, the lowest new home sales have seen ever since tracking by the Home Builders Research first began in 1988. Las Vegas still is the national leader in terms of foreclosures and the fact that this is the year with more transactions than at the height of the bubble is telling to the peculiarity of the Vegas housing market, Business Insider pointed out.

Stoltz Real Estate Partners Pays $51m for N. Las Vegas Community Center

By Alex Girda, Associate Editor

A North Las Vegas community center has traded at the highest price reported for a commercial property in the Las Vegas Valley, VegasINC reports. Bala Cynwyd, Pa.-based Stoltz Real Estate Partners has acquired Deer Springs Town Center from Regency Centers Corp. in a $50.5 million deal. Lucescu Realty arranged the transaction.

Located on a 62-acre parcel at the intersection of the Interstate 215 Beltway and 5th Street, the 512,325-square foot retail center is home to such brands as Home Depot, Toys ‘R’ Us, Babies ‘R’ Us Ross Dress for Less, Target, PetSmart, Michaels and Staples. Also on the tenant roster are AT&T, In-N-Out, Nevada Federal Credit Union and Verizon Wireless.

At the time of the sale, Deer Springs Town Center’s occupancy rate stood at 86 percent. Not included in the transaction was a 143,160-square-foot Target store, which is owned by the big-box retailer.

The property’s $50 million-plus price tag may foreshadow what some analysts believe will be a stabilizing year for the area’s retail market. With job growth apparently on the horizon, upward movement in retail rental rates might follow.

As research from Marcus & Millichap Real Estate Investment Services Inc. suggests, 2013 might be the first year since 2008 to create stability in the region’s retail market, if not substantial growth.

Chart courtesy of Marcus & Millichap Real Estate Investment Services Inc.

Linq Unveils LED Frontage as High-Rolling Project Nears Home Stretch

By Alex Girda, Associate Editor

One of the most promising projects on the Las Vegas Strip is Caesars Entertainment’s $550 million Linq development. The new district will aim to make its mark on the city’s skyline with a retail and dining-based project anchored by the High Roller, an observation wheel that will reach a record-breaking 550 feet tall.

Most recently, developer Caruso Affiliated unveiled Linq’s logo as part of a 51-second online video.
That video is now unavailable, but VegasINC reports that it depicts a LED display packed with advertisements, if also somewhat smaller than that of the Strip’s largest marquee, Aria.

The Linq development could become the next big thing among the Strip’s constantly evolving attractions. The High Roller will become the world’s tallest observation wheel. The 550-foot tall structure will have a diameter of around 520 feet, and will transport visitors in 28 glass-enclosed cabins, each able to carry about 40 people. A full revolution of the wheel will take approximately 30 minutes, bringing its capacity to about 2,240 passengers per hour.

Linq will create around 3,000 construction jobs and 1,500 full-time positions after it opens during the fourth quarter.

Rendering: Caesars Entertainment

Downtown Project Buys Gold Spike; Redevelopment Plans Coming Up

By Alex Girda, Associate Editor

The Downtown Project is continuing a steady stream of acquisitions intended to transform central Las Vegas into what the non-profit redevelopment group calls “the most community-focused large city in the world.” Its latest purchase: the Gold Spike Hotel and Casino, which organization acquired from The Siegel Group Nevada Inc. The Downtown Project will announce its plans for the property in the next several months.

The Gold Spike has been a Downtown staple since its opening in 1976 as the 112-key Rendezvous. Downtown Project’s acquisition is the latest in a series of ownership changes during the past decade. In 2002, Barrick Gaming acquired the property from Jackie Gaughan. Most recently, the Siegel Group bought the Gold Spike five years ago in a $21 million deal.

The property is located near old Las Vegas City Hall, which is itself the subject of a redevelopment project. Zappos, the online retailer, is converting into the building into its new headquarters and plans to move in this fall. Tony Hsieh, Zappos’ CEO, also oversees the Downtown Project.

Gold Spike employees will be redirected towards new job opportunities at The Siegel Group’s other local properties, which include the Artisan Hotel Boutique and the Resort on Mount Charleston, or to the Downtown Project itself.

Image courtesy of user Wtstoffs via Wikimedia Commons

Forest City Launches $7M Makeover of Galleria at Sunset

By Alex Girda, Associate Editor

A makeover is in store for one of the region’s biggest retail properties: Galleria at Sunset, the 1 million-square-foot regional mall in Henderson. Forest City Enterprises Inc., the property’s owner-operator, is launching a $7 million upgrade that is scheduled for completion this fall,The Las Vegas Review-Journal reports. VCC USA will serve as contractor for the project.

Aside from a 2004 expansion, the project will be the first of its kind at the center since it opened in 1996. Galleria at Sunset is one of only three enclosed non-outlet malls in the Las Vegas Valley outside of the Las Vegas Strip.

Remodeling plans call for using materials like stone and wood to bring a more refined design to the Galleria’s current colorful exterior. The mall’s 140 stores and 13 food spots will also receive upgrades. In addition to the style revamp, Galleria at Sunset will feature a brand new family restroom which will include private nursing rooms and a family waiting area.

The renovations will also create room for a major new tenant: H&M, which will take a 20,000-square-foot, two-level space. To accommodate the store, Boutique Talulah, Express, Express Men’s and Bath & Body Works will relocate. Galleria at Sunset’s current anchor tenants include Dillard’s, Dick’s Sporting Goods, Macy’s, J.C. Penney and Kohl’s.

Photo credit: Forest City Enterprises Inc.

Hsieh’s Downtown Project Adds Vintage Western Hotel to Portfolio for $14M

By Alex Girda, Associate Editor

The Downtown Project has taken another step in its $350 million drive to revitalize central Las Vegas, acquiring the 116-key Western Hotel in a $14 million transaction, VegasINC reports.

The acquisition reflects the latest move by the organization spearheaded by Zappos CEO Tony Hsieh to restore the luster of the area surrounding Fremont Street.

An affiliate of the Downtown Project led by developer Andrew Donner bought the property from owner Tamares Real Estate, which closed the hotel in January 2012, Vegas Inc. noted. All told, the Downtown Project’s stated goal is to acquire $200 million worth of properties.

The Western’s guest rooms and 8,925-square-foot casino opened in 1970 under the ownership of Jackie Gaughan and Mel Exber. Among the property’s claims to fame was its giant bingo parlor, which could accommodate up to 1,020 players. The Western was among several primarily low-roller properties owned by Gaughan that included The Las Vegas Club, The Plaza, the Gold Spike and El Cortez.

Image courtesy of user Wtstoffs via Wikimedia Commons, GNU 1.2

Caesars Unveils $185M Makeover for Bill’s Gamblin’ Hall

By Alex Girda, Associate Editor

The city of Las Vegas might look back one day and identify the period following the Great Recession as a watershed era. Today’s trends—reinventing aging properties, a new focus on business, art and sport, a fresh take on the Strip’s megaresorts—are likely to shape the city’s success for years to come.

The latest vintage venue targeted for a makeover is Bill’s Gamblin’ Hall & Saloon. Caesars Entertainment shuttered the property on Feb. 3 and will re-launch it in 2014 as the Gansevoort Las Vegas after a $185 million renovation, The Las Vegas Sun reported.

In Bill’s place will be a boutique resort co-owned by Caesars; New York City-based Gansevoort Hotel Group; and Victor Drai, a high-end nightclub owner who also owns a location at the site. Gansevoort Las Vegas will offer guests 188 guest rooms, a Parisian apartment-style design by local company Tandem, and 19 suites. Also planned are a 40,000-square-foot casino, a lobby bar, lounge and retail space.

Drai’s current venue will remain in its location after the renovation, joined by the 65,000-square-foot Drai’s Beach Club and Nightclub near the hotel’s new rooftop pool.

Rendering: Caesars Entertainment