Owners of the Shops at Summerlin have signed their first tenant for the project’s office tower.
BusinesSuites, which offers furnished office space with a receptionist, phone and mail service, conference rooms and other typical workplace amenities, has taken roughly 16,000 square feet at the complex’s nine-story office building, developer Howard Hughes Corp. said today.
Terms were not disclosed.
BusinesSuites is taking a portion of the building’s third floor. It is the company’s third location in Las Vegas. Others are in the Hughes Center office park near the Strip and on Sahara Avenue just west of Interstate 15.
Based in Austin, Texas, the company also has locations in Maryland, Texas, Virginia, Pittsburgh, Raleigh, N.C., and Nashville, Tenn.
The lease comes as Las Vegas’ overbuilt office market still struggles to recover from the recession, which wiped out tenants and pushed numerous buildings into bankruptcy or foreclosure.
The valley’s market for office space is one of the worst in the country, with bloated vacancy rates and tiny asking rents.
Development is largely at a standstill, too.
Southern Nevada had a 21 percent office-vacancy rate in the fourth quarter of 2013, down slightly from 22 percent a year earlier, according to brokerage firm Colliers International. In 2005, during the boom, the rate was 8 percent.
Research firm Reis Inc. put the valley’s fourth-quarter vacancy rate at 26 percent, second highest in the country.
Meanwhile, the average asking rent was $1.87 per square foot in the fourth quarter, unchanged from a year earlier, Colliers reported.
The 200,000-square-foot Summerlin tower, with ground-floor retail and eight floors of offices, is under construction and slated to open in late 2014, around the same time as the rest of the 106-acre Shops at Summerlin.
Howard Hughes executives are pitching the project as Summerlin’s downtown, a pedestrian-friendly “urban center” with more than 125 shops and restaurants, including Macy’s, Dillard’s, Nordstrom Rack and Trader Joe’s.
Renderings show an outdoor mall that people can drive through and is built to look like a neighborhood, similar to Town Square.
Last year, Dallas-based Howard Hughes resumed construction of the project on Sahara Avenue at the 215 Beltway. Previous owner General Growth Properties had mothballed the complex in fall 2008, during the national economic meltdown.
General Growth filed for bankruptcy protection in spring 2009, and when it emerged the next year, it spun off Howard Hughes as a separate company with control over the Summerlin project, the broader Summerlin master-planned community and several other projects nationwide.
Howard Hughes says it spent $181 million in development costs on the Shops at Summerlin as of March 31, and it expects to fund the project with a $312 million construction loan that it hopes to obtain by the end of June.