LAS VEGAS-The two-building, 143,000-sf WesTech Business Center II has changed hands for $18.5 million. The fully leased mid-bay distribution center sits on nine acres at the southeast corner of Diablo Drive and Edmond Street in the Southwest sub-market of the Las Vegas Valley. About 30% of the space is built out as office.
Cable Capital Ventures acquired the property from local developer Jeffrey LaPour, who retains the property management assignment. LaPour tells GlobeSt.com he developed the center in 2002 at a cost of $9 million including the cost of the land, which cost $5.75 per sf at the time and is now valued at closer to $15 per sf. LaPour says he likely will reinvest the profits into a few hospitality developments he owns in the region.
"This is the first holding that I have sold since forming LaPour Partners in 2000," says LaPour. "I am a portfolio builder and generally do not sell but I received an offer too good to refuse."
WesTech Business Center Phase II is 100% leased. Tenants include Adams Brothers Interiors, Hyloft, and ImpoGlaze Tile. LaPour says the purchase price, which translates to $129 per sf, is among the highest per-sf prices ever paid for distribution space. The cap rate on the deal was approximately 6.15%, says LaPour.
Brian Gordon, a principal with Applied Analysis, a business advisory firm, tells GlobeSt.com that the average per-sf sales price for all industrial types of industrial space in 2005 was $123 per sf, up from $87 per sf in 2003. The average cap rate in 2005 was 7.7%, he says.
"We're seeing pricing levels continue to escalate along with land and construction costs and we're not going to see much pullback barring an unexpected catastrophic event," he says.
Despite the low cap rate, LaPour says the property is a "great buy" for Cable Capital because the property is located in an area where such product can't ever be reproduced because of rising land costs and a lack of available property. Moreover, he says there has been only a very small amount of rollover at the property and what has occurred has generated "sizeable rent bumps."
Mike Delew and Greg Pancirov of Colliers International represented LaPour; Mark Weeks of Voit Commercial Brokerage in Anaheim, CA represented Cable Capital Ventures.
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