Summerlin office buildings sold in massive deal
General Growth Properties has sold its portfolio of 32 local office buildings, in one of the largest real estate deals in Las Vegas in years.
The 1.1 million-square-foot portfolio in Summerlin was sold last week to Hines Interests LP and Oaktree Capital Management LP, Hines spokeswoman Kim Jagger confirmed Tuesday. She declined to disclose the sales price.
The Sun first reported on Sept. 11 that Hines, a Houston-based real estate giant, was pairing with Los Angeles-based Oaktree, an international investment firm, to buy the properties.
Brokers have said the companies would be paying about $115 per square foot — or $127 million — although many cautioned the sales price could turn out to be less.
As of Tuesday, the sale was not yet recorded with Clark County.
Hines said in a press release Tuesday that it made the acquisition through a joint venture with a subsidiary of real estate funds managed by Oaktree. This was the sixth deal between Oaktree’s real estate group and Hines over the past two years.
Hines Managing Director Doug Metzler said in a prepared statement that they will work “to return the portfolio to its former position in the market.”
The 32 buildings are reportedly half vacant, and it’s unclear how, or if, Hines and Oaktree can fill them with tenants.
The northwest valley, where the buildings are located, had an office vacancy rate of about 26 percent in the second quarter, higher than Southern Nevada’s 24 percent vacancy rate.
Still, the sale will boost the valley’s commercial real estate sector, in part because it marks Hines’ entry into the local market. The company owns numerous large, high-quality commercial properties around the world and has offices in 18 countries. It controls nearly $23 billion in assets, with buildings in the United States, Brazil, China and many other countries, but none in Nevada.
The deal also will let the once-bankrupt General Growth focus more closely on its main business — shopping malls. The Chicago-based company owns or partially owns 149 regional malls, with four in the valley, including Fashion Show mall and the Grand Canal Shoppes at the Venetian.
The sale is one of the largest commercial real estate deals in years and rivals the mid-2000s sale of a cluster of buildings in southwest Las Vegas.
That 400,000-square-foot complex reportedly sold at the height of the building boom for more than $300 per square foot, or at least $120 million.
Most of General Growth’s office buildings are on North Town Center Drive, Covington Cross Drive and West Charleston Boulevard. Hines said the portfolio also includes two development parcels totaling 19 acres.