Bow River Capital, a Denver-based private alternative asset management company, announced today that its Real Estate Fund II sold Gateway Phase I, a 17.6-acre Henderson, Nevada property that is part of a larger 25.8-acre industrial property.
“Gateway Phase I is the latest and best example of the tremendous demand we’re seeing for light industrial in the Rocky Mountain West and Southwest, an area that we refer to as the Rodeo Region,” said Nicholas Koncilja, managing director of Bow River’s Real Estate platform. “Given inadequate supply and growing demand, we expect this trend to continue for the foreseeable future.”
In just three years, Gateway Phase I returned 1.5x gross project multiple on invested capital (MOIC) and 19.0% gross project Internal Rate of Return (IRR). The sale marks the third property disposition from Bow River’s Real Estate Fund II, which had its final close on July 31, 2018 and is currently 54% distributed on paid-in capital.
Gateway Phase I is located on the northwest corner of Executive Airport Drive and Sunridge Heights Road in Henderson, south of the McCarran International Airport and the Las Vegas Strip. At the time of investment in April 2018, Southern Nevada saw strong demand for industrial space, given the centrally located access to major coastal markets, with a vacancy rate of 4.3%. Today the vacancy rate is 6.0%.
Strategically located adjacent to the newly-built Las Vegas Raiders practice facility and headquarters, Gateway Phase I represented an opportunity to invest in unmet local demand. Henderson, which is a growing submarket, has experienced increasing rental rates and historically low vacancy rates.
The total development will consist of seven Class A industrial buildings totaling 480,000 square feet. Phase I was 300,000 square feet across four buildings and was fully leased at the time of sale. Phase II is currently under construction and is seeing strong pre-leasing activity.
About Bow River Capital
Founded in 2003, Bow River Capital (“Bow River”) is a private alternative asset management company based in Denver, Colorado, with Buyout Private Equity, Real Estate and Software Growth Equity platforms. The Bow River Funds focus on the lower middle market across a geographic area referred to as Bow River Capital’s Rodeo Region®, which encompasses the Rocky Mountains and surrounding states. Collectively, Bow River has deployed capital into diverse industries, asset classes, and across the capital structure.