Building Nevada - January 2002

Investing in Southern Nevada

SCI Purchases Retail Properties

Los Angeles-based SCI, a diversified real estate investment company, has purchased a total of 10 commercial properties in the Las Vegas Valley during the past 12 months, increasing its Las Vegas portfolio value to more than $60 million.

In early 2001, through a partnership with RDS/Insight, SCI acquired BrookHollow Corporate Center, a 6.8-acre corner parcel consisting of more than 100,000 square feet of industrial/office flex space. Its most recent addition is the $11.8 million Red Rock Retail Center, located on Craig Road and El Camino in North Las Vegas, purchased in a joint venture with an Oregon investor. The 82,138-square-foot retail center is anchored by Office Depot, Michael’s and 99 Cents Only stores. In November, SCI acquired Gateway Plaza, a $7 million retail center at Pecos Road and Sunset. The company will soon open its second RE/MAX commercial brokerage franchise in the West at the 35,128-square-foot center.

Robert Robotti and Marc Paul founded SCI in 1994. Robotti is the chief financial officer of both SCI Inc. and SCI Property Management. Paul serves as president of SCI Inc. and SCI Property Management, Inc. Both are owners and managing directors of SCI’s RE/MAX commercial franchises. SCI has acquired and sold over 100 properties in joint venture with its network of investors throughout California and Nevada. These investments have generated in excess of 15 percent annualized returns for private investors during the past eight years. Its current portfolio consists of over 40 industrial, office and retail properties, single-tenant rentals and apartment buildings, valued in excess of $95 million.

SCI invests in large real estate joint venture projects with developers, financial institutions, 1031 exchange clients and accredited investors. The minimum project value is $2 million. Investments are typically held and effectively managed for three to seven years, until each property’s value matures. So-called 1031 tax-deferred exchanges are available for income properties when the profits from the sale of a property can be deferred through the acquisition of another, qualified property. "SCI has been able to achieve solid returns by applying a comprehensive acquisition strategy coupled with an unsurpassed ability to ‘add value’ to investment properties," said Paul. "Maintaining high occupancy rates and increasing the net operating income of the property are the typical drivers of value." SCI’s main objective for its Southern Nevada portfolio, according to Paul, is to acquire properties that combine the benefits of safety, quality, solid cash flow and future appreciation in well-located areas.

SCI also recognizes that professional property management is the key to a successful long-term real estate investment. SCI manages portfolio properties on behalf of its investors through its property management division, using carefully monitored third-party professional management companies when necessary. SCI's past acquisitions have included properties that required rehabilitation and repositioning in the market to capture their true market value. SCI’s property management division initiated and completed the necessary renovations to enable investors to realize a significant increase in the market value of their investments.

"When we entered the Las Vegas area, not only did we encounter a thriving real estate market, but also a city whose leaders are committed to an entrepreneurial spirit and vision," said Robert Robotti. "We both knew we had arrived at the right time and the right place."