Developer Scoops up 38-acre IGT Campus in Southwest Valley for $75M
Wednesday, January 6th 2016
LAS VEGAS, NV – Developer Doug Roberts is one of many investors building large industrial properties in the valley without tenants lined up.
Now he’s got another big property to shop around — but he didn’t have to build a thing.
Roberts, a partner with Panattoni Development Co., has bought International Game Technology’s 38-acre campus in southwest Las Vegas for $75 million.
The sale closed Dec. 30, county records show.
IGT listed the 610,140-square-foot property at Buffalo Drive and Sunset Road for $85 million last year after the company was acquired by Italian lottery operator Gtech. The slot-machine maker plans to lease back a three-story office building — estimated to comprise a third of the campus — for 15 years, brokers said.
Roberts has to find users for the rest of the property. Most of that is industrial space.
Panattoni’s purchase — at a price well above market-average — is the latest big investment in Southern Nevada’s industrial real estate sector, which is heating up with speculative development. Many of those projects are in the southwest valley.
More than 1.7 million square feet of warehouse, distribution and other industrial space was under construction in Southern Nevada by third-quarter’s end in 2015. Additionally, more than 5.4 million square feet is being planned, according to brokerage firm Colliers International.
Business boosters and others have said Las Vegas has a shortage of large industrial buildings. Time will tell if investors are piling in too fast, but so far, demand for space appears strong.
Southern Nevada’s industrial market had a 5.8 percent vacancy rate in the third quarter of 2015, down from 8.7 percent a year earlier and almost 15 percent in 2010, according to Colliers.
Developers are focusing almost entirely on properties at least 150,000 square feet in size with no tenants in place yet. Roberts is one of them.
In the southwest valley, he’s developing a 20-acre speculative project, with two 208,000-square-foot buildings, just two miles east of IGT’s property.
Reached for comment on his purchase, Roberts said in an email Monday that he had to “wait a bit for corporate communications to approve any releases.” He also noted that he’s on a cruise.
IGT spokesman Phil O’Shaughnessy did not respond to a request for comment.
There was “certainly some buzz” after IGT’s property went on the market, but there may not have been “too many” offers because of its size and mixed-use design, CBRE Group broker Greg Tassi said.
“There are very few buildings around that are that size, which means there are very few people who’d be takers,” said developer Jay Heller, co-founder of Heller Cos.
IGT’s industrial space is split into two, roughly 148,000-square-foot sections, with about 111,000 square feet of offices connecting them, a broker said.
Tassi — a listing broker for some of Roberts’ properties, but who was not involved in the IGT deal — said developers with projects on the drawing board in the southwest face the risk that Roberts will scoop up tenants first.
“He’s going to get a look from anybody who needs 100,000 square feet,” Tassi said.
One thing’s for sure: The IGT deal was big on many fronts.
Roberts’ purchase amounts to roughly $123 per square foot. By comparison, according to Colliers, industrial-property investors in Southern Nevada paid an average $87 per square foot last year through the third quarter, and the average property sold was 64,000 square feet, one-tenth the size of IGT’s campus.
Gtech closed its acquisition of IGT in April, in a $6.4 billion deal. The newly formed company, still known as IGT, is headquartered in London and has said it plans to maintain an active presence in Nevada, with offices in Las Vegas and manufacturing operations in Reno.
CEO Marco Sala said in August that the company had signed a letter of intent to sell the campus, though he did not disclose the buyer. He also said IGT planned to lease back a portion of the property.
At the time, O’Shaughnessy said IGT wasn’t making complete use of the facility, especially its industrial space.
The campus, which opened in 2008, isn’t the only asset the company sought to sell in the wake of Gtech’s buyout.
Sala said in August that IGT had reached a deal to sell 20 acres of land in Reno, though he did not name the buyer. He also said the company was in “the final stages” of selling a corporate jet that was once the subject of controversy due to alleged personal use by former IGT chief executive Patti Hart.
Meanwhile, IGT wasn’t the only casino-equipment manufacturer to be part of a big merger the past few years.
Rival slot-machine maker Bally Technologies was acquired by lottery company Scientific Games for $5.1 billion in 2014. Afterward, Scientific Games said it would move its corporate headquarters from New York to Las Vegas.
Roberts built those headquarters, at Jones Boulevard and Sunset Road in the southwest valley, for the former Shfl Entertainment. Bally bought Shfl for more than $1 billion in 2013, around the time that 130,000-square-foot building opened.
Roberts also was planning to build a property for Gtech in southwest Las Vegas, but the project was shelved, broker Tassi said, apparently because of the IGT buyout.