The cranes have returned to the Las Vegas Valley

By Eli Segall

Sunday, April 10, 2016 | 2 a.m.

Jeff LaPour developed dozens of industrial buildings over the years, but his pipeline evaporated last decade when the economy crashed.

Now, with construction picking up and investors betting big on new industrial parks, LaPour is back in the game.

Head of LaPour Partners, he has teamed with Dallas developer Jackson-Shaw to build Parc Post, a four-building, 165,234-square-foot industrial project in southwest Las Vegas. Construction is underway on the 9.3-acre site and, according to LaPour, is expected to finish in June.

The project underscores the state of Las Vegas’ once-decimated construction industry. Many new projects involve warehouse, distribution and other industrial space, often built as speculative developments. And much of the valley’s construction is in the southwest, where investors are building apartments, housing tracts, retail centers, an Ikea furniture superstore and industrial properties.

Overall, more than 1.5 million square feet of industrial space was under construction in the valley by late 2015 and 7.8 million square feet was planned, according to Colliers International.

As business picks up, LaPour is one of several developers taking the same, risky approach: They’re starting construction, or planning to, on “spec,” figuring demand for space is strong enough that properties won’t sit empty for long, or at all.

If investors outstrip demand with a glut of new space, however, that could push down rental rates and leave projects empty and vulnerable to foreclosure.

But LaPour said he isn’t worried about building Parc Post amid the wave of projects. He said his $15 million development, on Post Road between Jones and Rainbow boulevards, has 25,000-square-foot, 35,000-square-foot and two 52,000-square-foot buildings, and users can take 12,000-square-foot chunks. Most new industrial projects in town involve much larger buildings.

Developer VanTrust Real Estate of Kansas City, Mo., for instance, recently broke ground on a 120-acre industrial project in North Las Vegas. The Northgate Distribution Center is one of the largest speculative developments in Nevada history, according to the developer, with a 558,000-square-foot distribution center and a 247,750-square-foot warehouse planned for the first phase alone.

Big-box projects compete for large tenants, and LaPour figures that going smaller gives him and Jackson-Shaw an advantage.

“The majority of what you see being produced and built is much, much larger space,” he said.

LaPour worked for Jackson-Shaw for about six years before starting his own company in 2000. He said he developed 15 to 20 industrial buildings and was a partner in the business. He has developed 38 industrial buildings in Nevada, Arizona and California since he left.

Parc Post is LaPour’s first industrial development in Las Vegas since 2007.

When the recession hit, property values plunged, vacancy rates soared and construction all but stopped in the valley. LaPour bought, sold and renovated properties, but for several years, “we weren’t doing any development,” he said.

Investors built 31 million square feet of industrial space locally from 2002 to 2008, with 6.8 million square feet in 2007 alone, and the market’s vacancy rate was just 3 percent in 2006, according to Colliers. Then the bubble burst. The valley’s industrial vacancy rate soared to almost 15 percent by 2010, and no projects opened in 2012.

Altogether, Jackson-Shaw has developed about 46 million square feet of real estate, including a dozen or so projects in Las Vegas, President and Chief Operating Officer Michele Wheeler said.

Wheeler is bullish on Las Vegas but said she wouldn’t have built Parc Post three or four years ago. Users weren’t taking as much space as they are today, and it would have been tougher to land financing.

“It would have been more challenging to put together,” she said.