Las Vegas Office Building Sells for $67M

After a seven-year hold, Virtua Partners has closed on the disposition of a Class A office building at 2716 N. Tenaya Way in Las Vegas. With the assistance of Cushman & Wakefield, Virtua sold the approximately 204,100-square-foot, fully occupied property to Premier Realty Holdings LP in a transaction valued at $67 million.

Virtua had owned 2716 N. Tenaya since 2014, when it acquired the asset for $60 million. The property, occupied in its entirety by United HealthCare Services Inc., turned heads in the investment community.

“High net worth, private capital buyers expressed interest in this transaction. 1031-exchange motivations fueled interest in the transaction as well and the majority of investors who expressed interest were located within the western region,” Marlene Fujita, an executive director with Cushman & Wakefield’s Capital Markets team, told Commercial Property Executive.

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Rick Reeder, Brad Tecca and Charles Moore of Cushman & Wakefield joined Fujita in representing Virtua, while Voit Real Estate Services’ Mike Bench represented Premier Realty.

2716 N. Tenaya Way. Image courtesy of Virtua Partners

2716 N. Tenaya, located along a stretch that has evolved into a medical corridor of sorts, with clinics, medical office buildings and other hospital support services, has featured United HealthCare as the sole name on its tenant roster since reaching completion in 1998. The office building serves as the health-care company’s regional headquarters and encompasses a host of amenities, including a conference facility, a 40,000-square-foot cafeteria, multiple breakrooms and a credit union. United HealthCare owns the adjacent building, so together with 2716 N. Tenaya, the buildings essentially operate as a single campus.

Big-ticket transaction

The 2716 N. Tenaya deal marks an important juncture in the Las Vegas office market this year. “The sale represents the highest trade price for an office transaction in 2021, not to mention the largest single-tenant office transaction,” Fujita said. “This transaction indicates an investment in the tenant credit, Nevada’s largest HMO, as well as the building’s location.”

The office sales landscape has changed drastically in Las Vegas over the last 12 months as the city recovers from the pandemic effect. Sales volume went from 11 properties totaling $73 million in the third quarter of 2020 to 10 assets totaling $139 million in the third quarter of 2021, according to a Cushman & Wakefield report. The average year-over-year sale price jumped from $192 to $243 per square foot. 2716 N. Tenaya fetched roughly $328 per square foot.