At The Top - September 2006

Harsch Investment Properties

Bullish on Southern Nevada Market

by Kathleen Foley

Harsch Investment Properties, a privately-held company based in Portland, Ore., began developing commercial real estate projects in Southern Nevada in 1995, and now owns and manages 6.8 million square feet in the Las Vegas Valley, mainly in industrial business parks.

John Ramous, vice president of operations for the company, heads up the Las Vegas office. He reported that the company currently has 900,000 square feet either under construction or in the permitting process, and another 1 million square feet on the drawing board.

Although rising prices for industrial land have many developers worried about a downturn in the market, Ramous said he doesn’t foresee a slump in the immediate future. "We are definitely bullish on the Las Vegas market," he stated. In fact, despite high prices, Ramous said Harsch is continuing to buy land in specific areas as part of its long-term growth plan.

Major projects currently under development include Speedway Commerce Center, Henderson Commerce Center and Cheyenne Commerce Center. The Speedway facility, with 1.4 million square feet of light industrial space on 93 acres, is 99 percent leased, with the average tenant occupying just 7,500 square feet. "With smaller tenants, it’s sometimes hard to keep turnover low," said Ramous. "We’ve found that having on-site managers keeps tenants happy."

Harsch has developed a number of properties in Henderson over the past five years, including the Henderson Commerce Center, located just east of U.S. Highway 95 on Warm Springs Road. Phase I contains 360,000 square feet of distribution space in two tilt-up buildings. Phase II, scheduled for completion in the third quarter of 2007, will comprise five buildings with 245,000 square feet of industrial space. Phases III and IV may contain some flex office product.

In North Las Vegas, Harsch is building the second phase of Cheyenne Commerce Center, a three-phase project that contains 102,000 square feet of smaller-bay product.

The company’s long-term strategy for the Las Vegas market is to maintain a strong presence in industrial business parks, according to Ramous. Nevertheless, it is venturing into the office market, planning its first ground-up mid-rise office project at Warm Springs and U.S. 95. Ramous said Harsch has no plans to enter the high-rise residential market, but remarked, "Don’t rule us out – we have the capability. Although high-rise residential is not our core competency, for some of our parcels, it may be a higher and better use of the property."

Since Harsh came to Southern Nevada 11 years ago, it has both developed and re-developed properties, including the Center at Spring Mountain, a 375,000-square-foot retail and business center that recently underwent a $10 million transformation. "The main component of our growth in the next 24 to 36 months will be development," said Ramous. "But, we’re in it for the long haul. Ten years from now there will be plenty of opportunities to redevelop our older properties."

Jordan Schnitzer, president of the company, calls Harsch a "regionally-driven organization," adding, "We put tools in the hands of each regional team so they can best serve our tenants. You need both a strong central leadership and also a good team in each region, and communication between them is the key. You never want to second-guess local knowledge, but you also have to have the ability to see the big picture for the entire company." Besides its Las Vegas office, Harsch also operates in Seattle, Portland, Sacramento, San Francisco and San Diego, and will open an office in Phoenix soon.

Kathleen Foley
Kathleen Foley is a freelance writer based in Southern Nevada.