A joint venture between New York-based real estate investment firm Rockwood Capital and Vestar Development has acquired a retail property on the outskirts of Las Vegas for $79 million – a substantial discount to the property’s development cost. According to an announcement, the joint venture purchased The District at Green Valley Ranch from LNR Partners in an all-cash deal.
Although the venture declined to disclose each firm's ownership stake, a spokesman for the venture confirmed that Rockwood provided the bulk of the capital, while Vestar will serve as the operator and manager of the property. The 384,107-square-foot shopping centre, situated in a master-planned community in the Black Mountain foothills 10 miles from the Las Vegas Strip, initially was developed for $170 million.
Rockwood Capital managing director Joel Mayer said in a statement: “We believe this is a compelling opportunity based upon the high quality of the centre and the solid in-place cash flow. We have a longstanding relationship with Vestar, and their extensive knowledge of this asset and the market make them the ideal partner for this investment.”
“Now is a great time to invest in the Las Vegas retail real estate market, particularly in assets like this one,” added Rick Kuhle, president of Vestar Development. “This centre recently has struggled, but we are confident about stabilising it over the coming year. We're very bullish about these types of value-added investment opportunities and are aggressively seeking more properties like it in Las Vegas and throughout the West.” Kuhle said the venture expects this investment to be a five- to seven-year hold.
The first phase of The District was developed in 2004 and encompasses 212,622 square feet of retail and office space on 21.54 acres on the west side of Green Valley Parkway. That phase is comprised of 50 stores and restaurants, 88 condominiums and roughly 20,000 square feet of office space. Phase one is 85 percent leased to tenants that include REI, Pottery Barn, Williams-Sonoma, Ann Taylor Loft and PF Chang’s.
The District's second phase was developed in 2006 and totals 171,485 square feet on 16.02 acres. That phase consists of six buildings with a retail and office tenant mix. Phase two is 82 percent leased and anchored by Whole Foods.