98°F
weather icon Partly Cloudy

Summerlin sees increased development

The Las Vegas Valley’s office market has charged forward on a path toward expansion and recovery with areas such as Summerlin exploding with development and demand as users seek well-located offices in amenity-rich areas.

Summerlin developer Howard Hughes Corp. is closing in on a fall completion of its six-story Class A office tower under development in the Downtown Summerlin area. But already, the 152,300-square-foot project has attracted a heavy interest from potential users and garnered significant preleasing activity.

“We’ve got significant preleasing — more preleasing than I’ve ever seen in any other office than I’ve been involved in,” said Summerlin President Kevin Orrock, a Howard Hughes executive who has been in the organization for more than four decades. “We’ve got interest in almost every square foot in the office building.”

Not all the deals are set in stone, but there is significant interest on every floor of the under-construction office building at Griffith Peak and Pavilion Center drives.

The project follows Howard Hughes’ well-received One Summerlin project — a nine-story, roughly 200,000-square-foot office building in Downtown Summerlin that came online in the second quarter of 2015. That followed the October 2014 opening of the 106-acre open-air mall.

The initial projects such as the mall, which contains several dining and entertainment options, and the nine-story building sat west of Pavilion Center Drive, with the newer projects sitting east of there.

The newest office development by Howard Hughes is attracting several types of potential tenants to the new building, including lawyers, brokers and gaming technology companies, according to Orrock.

“I think it gets down to what we’ve done here in Summerlin,” Orrock said. “We’re providing an urban core. We’re providing a place where people want to live, work and play — plus the sports venues that are here or will be here.”

The Vegas Golden Knights opened its practice facility (City National Arena) in 2017 in the Downtown Summerlin area. The Triple-A baseball team, the Las Vegas 51s, which is set to get a new name and branding for its 2019 season, will have its home base moved to Downtown Summerlin to what’s dubbed the Las Vegas Ballpark.

Orrock said these projects sit in what he referred to as Summerlin’s urban core that spreads across some 400 acres and is bordered by the 215 Beltway and Town Center Drive on the east and west sides, with Charleston Boulevard and Sahara Avenue on the northern and southern ends.

No one can replicate what Howard Hughes has been able to produce in Summerlin, said Orrock who foresees more office development in the region.

“You’re going to see significant residential development as well,” he said.

In 2016, the Calida Group completed development of the 124-unit Constellation luxury apartment complex in Downtown Summerlin. Orrock said there is an additional 267-unit complex under construction in the region.

Overall, the Downtown Summerlin area is set to see over 4,000 residences developed, Overall, the Downtown Summerlin area is set to see over 4,000 residences developed, including apartments, condominiums, lofts and brownstones.

Just five minutes down the Beltway, Howard Hughes is developing a build-to-suit project for Australian slot machine maker, Aristocrat Technologies. Howard Hughes is developing a 180,000-square-foot headquarters with two three-story buildings for the company at Hualapai Way and the 215 Beltway.

“I think there’s relatively little new development in the office market,” Orrock said.

The majority of new development, however, is in the northwest submarket, he added.

“I think that speaks volumes as well,” Orrock said.

The northwest submarket has seen vacancy averages lower than the citywide numbers. In the northwest submarket, Colliers International Las Vegas’ first quarter report in 2018 put the average vacancy for all class types at 14.3 percent — lower than the area’s average vacancy rate of 15.1 percent.

The area-wide average is down from 16.9 percent vacancy from the first quarter in 2017, according to the Colliers’ report. That is still higher than the 9 percent vacancy rate for the pre-2006 average, according to the report.

Projects in the Summerlin area have a big draw for clients of local commercial brokers.

Daniel Palmeri, senior director at Cushman &Wakefield in Las Vegas, said Summerlin is the most desirable location in the valley.

Palmeri said that many of there valley’s top-level decision-makers live in the Summerlin area.

“With that, we’ve really seen a migration for companies that don’t need to be centrally located moving to, not only Summerlin, but more specifically, recently, Downtown Summerlin; because the decision-makers live out there,” he said.

The drive is roughly five minutes to Downtown Summerlin, compared to driving to other submarkets such as downtown, which is a 20-minute drive from the northwest suburb.

Across the nation, Palmeri said that there’s an exploding niche of mixed-use projects: “They call it live, work, play.”

“If you can live there, work there and play there, that’s an ideal environment,” he said. “That’s indicative of most urban cities, where you live in the cities. You work a couple blocks away. That’s it. That’s your little world.”

In comparison, Palmeri said Las Vegas has historically been a sprawled city — requiring people to drive 20 to 30 minutes to anywhere. But that’s changing with these types of projects showing up in the valley, which people are adapting to, especially the millennials, according to Palmeri.

Palmeri said employers are considering millennials predominately when making decisions on where a company is going to locate its office.

Most employers ask where amenities are in proximity to the potential office space, in regard to things such as area restaurants and retail shops such as Trader Joe’s in the mall in Downtown Summerlin.

“It truly creates a different quality of life because everything’s there at the ready. And not only that, but everything’s nice and brand new,” Palmeri said. “You’re getting the best of what the market’s providing, and it’s right by your house.”

Don't miss the big stories. Like us on Facebook.
THE LATEST
Former HOA president accused of creating havoc

Nevada Revised Statute 116.31184 addresses threats, harassment and other conduct that is prohibited by this law. The law further clarifies as follows: The action causes harm or serious emotional distress or the reasonable apprehension thereof to that person or creates a hostile environment for that person. A person who violates this provision can be found guilty of a misdemeanor.

Southern Nevada home prices rise; fewer homes sell

A report released Wednesday by Las Vegas Realtors shows local home prices setting another all-time record despite the coronavirus pandemic, though fewer homes sold in August than during the same time last year.

Home + History mix of vitual, live events

The Nevada Preservation Foundation usually holds its annual Home + History tours in April. This year, the events will be a mix of live and virtual activities. Most of the events are sold out. They started on Friday and will continue through Sunday.

HOA board member has a lot of questions

Note: Last week, we left out the names of my column’s guest writers. They are John Leach, Cheri Hauer and Donna Zanetti of the law firm Leach, Kern, Gruchow, Anderson and Song.

Nevada Realtors statement on eviction moratorium extension

This week, Nevada Realtors issued a statement from NVR President Chris Bishop about Nevada Gov. Steve Sisolak’s Aug. 31 announcement that extended the state’s moratorium on evictions for another 45 days beyond the original Sept. 1 expiration date:

How to know if real estate is right for you

Should I go into real estate? Real estate is a unique opportunity. Let’s go back 10 years, when we had the downturn. What was selling? Even with thousands and thousands of foreclosures. People still bought homes and the industry kept going.

Move 4 Less assists HELP of Southern Nevada clients

Seven former homeless adults are sleeping in their own beds in their own apartments. They are clients of HELP of Southern Nevada, who have entered the nonprofit organization’s Hospital to Home housing program. To make their transition from homelessness a reality, Move 4 Less assisted HELP of Southern Nevada by moving new mattresses and frames into the seven client apartments.

New bill limiting COVID-19 liability covers HOAs

During the 32nd Special Legislative Session, the Nevada Legislature passed and the governor signed Senate Bill 4, which limits liability for COVID-19 related claims for most businesses and nonprofits. Initially, the bill did not cover common-interest communities, but thanks to the work of industry groups such as Community Association Institute of Nevada’s Legislative Action Committee (CAI LAC) and the Nevada Association of Community Managers (NACM), SB 4 was amended to include our industry.

REAL ESTATE BRIEFS

CALV to host virtual Commercial Education Day

HOA should rethink removing its community gate

To remove the automatic gate would require the vote of the board of directors. As much as the gate system can be costly to maintain, you need to ask the question why was the automatic gate system installed in the first place. To remove the gate now could cause a backlash from homeowners who wanted the gate installed for security reasons.