International Game Technology is making progress on efforts to offer its Las Vegas corporate school, a huge office, production and warehouse facility in the southwest valley that the significant slot machine maker has occupied for several years.
IGT said soon after merging with the Italian lottery operator Gtech previously this year that it prepared to offer its roughly 610,000-square-foot head office at 6355 S. Buffalo Drive, which was built specifically for the company in 2008. On IGT’s quarterly earnings call today– the very first time it reported as a combined business since the $6.4 billion merger closed– CEO Marco Sala said those plans are moving on.
Sala said IGT has entered into a letter of intent to offer the headquarters, although the company will most likely set up a lease-back plan for “a part of the facility.” He stated IGT hopes to close the transaction in the fourth quarter of this year.
Sala did not specify information of the sale, consisting of a cost, a potential buyer or precisely how much of the space IGT means to lease back. An undated info memorandum from Colliers International, nevertheless, notes a sales rate of $85 million– or $139 per square foot– for the school.
Colliers broker Dan Doherty stated there has been a “substantial quantity of interest” in the building. He defined it as a distinct listing not just because of its size, but likewise because of its features.
“Anytime we have actually had structures developed this large, which there’s only been a handful, they are normally either delivered as full office structures or complete storage facility buildings– never ever a combination of the 2,” Doherty said. “I’ve never seen one offered for sale of this size. I have actually only seen truly big buildings provided through lease.”
Though the sale stands to decrease the slot and lotto business’s presence in among the world’s major gambling hubs, it’s consistent with IGT’s post-merger vision. The company, which is now baseded in the United Kingdom, stated when the merger was wrapping up that it would focus on manufacturing in Reno and concentrate on its gaming business in Las Vegas.
Sala stated that point on IGT’s first-quarter earnings call in May, when he said the company had begun a “marketing campaign” to sell the Las Vegas head office.
“While we will preserve an essential presence in Las Vegas, we are enhancing our footprint now that we are consolidating our commercial activities in Reno,” he said at the time.
With the Gtech merger total, IGT is now divided into four business segments: North American video gaming, North American lotto, Italian and worldwide. The North American gaming division is based in Las Vegas.
IGT spokesperson Phil O’Shaughnessy stated the business remains to have a “huge dedication” to Las Vegas and Nevada in basic. The sale makes good sense due to the fact that IGT wasn’t entirely using its Las Vegas facility, specifically the warehouse portion, O’Shaughnessy said.
“This is all part of our continuous efforts to increase operational effectiveness by transferring to a smaller sized center that was appropriately sized to house our Vegas labor force,” he stated.
One part of the IGT structure is used for production and warehouse area; the other part is workplaces. Greg Tassi, a broker with CBRE who is not included with the sale, stated the warehouse space would be simple for a business to move into because it’s a “extremely generic” area.
“It is an unique home with that workplace component right in the middle, however the two warehouse wings, for lack of a better term, are really functional warehouse structures,” Tassi said. “If (the combined IGT) is going to rent back those workplace buildings, I think that’s a slam dunk for any seasoned commercial investor.”
Tassi stated he might imagine an e-commerce or transportation company making the most of the IGT warehouse area, or another business could utilize it for light manufacturing.
A structure sale would not be the only modification in Nevada for the recently combined variation of IGT. Sala said on the incomes call today that the company has likewise executed a purchase and sale arrangement including 20 acres of “excess land” in Reno. And he said IGT has made “great progress” in shifting all of its North American production operations to Reno.
Competing company Scientific Games has gone in the opposite instructions as IGT in Las Vegas. After getting fruit machine maker Bally Technologies for $5.1 billion in 2013, Scientific Games announced in January that it was moving its corporate headquarters from New York to Las Vegas.