International Game Technology working on deal to sell Las Vegas headquarters

An exterior view of International Game Technology headquarters at 6355 S. Buffalo Drive on Thursday, Aug. 13, 2015.

International Game Technology is making progress on efforts to sell its Las Vegas corporate campus, a huge office, manufacturing and warehouse facility in the southwest valley that the major slot machine maker has occupied for years.

IGT said shortly after merging with the Italian lottery operator Gtech earlier this year that it planned to sell its roughly 610,000-square-foot headquarters at 6355 S. Buffalo Drive, which was built specifically for the company in 2008. On IGT’s quarterly earnings call this week — the first time it reported as a combined business since the $6.4 billion merger closed — CEO Marco Sala said those plans are moving forward.

Sala said IGT has entered into a letter of intent to sell the headquarters, although the company will probably set up a lease-back arrangement for “a portion of the facility.” He said IGT hopes to close the transaction in the fourth quarter of this year.

Sala did not specify details of the sale, including a price, a potential buyer or exactly how much of the space IGT intends to lease back. An undated information memorandum from Colliers International, however, lists a sales price of $85 million — or $139 per square foot — for the campus.

Colliers broker Dan Doherty said there has been a “significant amount of interest” in the property. He characterized it as a unique listing not only because of its size, but also because of its features.

“Anytime we’ve had buildings built this large, which there’s only been a handful, they are typically either delivered as complete office buildings or complete warehouse buildings — never a combination of the two,” Doherty said. “I’ve never seen one offered for sale of this size. I’ve only seen really big buildings offered through lease.”

Though the sale stands to reduce the slot and lottery company’s presence in one of the world’s main gambling hubs, it’s consistent with IGT’s post-merger vision. The company, which is now headquartered in the United Kingdom, said when the merger was wrapping up that it would focus on manufacturing in Reno and concentrate on its gaming business in Las Vegas.

Sala reiterated 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 headquarters.

“While we will maintain an important presence in Las Vegas, we are optimizing our footprint now that we are consolidating our industrial activities in Reno,” he said at the time.

With the Gtech merger complete, IGT is now divided into four business segments: North American gaming, North American lottery, Italian and international. The North American gaming division is based in Las Vegas.

IGT spokesman Phil O’Shaughnessy said the company continues to have a “big commitment” to Las Vegas and Nevada in general. The sale makes sense because IGT wasn’t completely utilizing its Las Vegas facility, specifically the warehouse portion, O’Shaughnessy said.

“This is all part of our ongoing efforts to increase operational efficiency by moving to a smaller facility that was appropriately sized to house our Vegas workforce,” he said.

One part of the IGT building is used for manufacturing and warehouse space; the other part is offices. Greg Tassi, a broker with CBRE who is not involved with the sale, said the warehouse space would be easy for a company to move into because it’s a “very generic” space.

“It is a unique property with that office component right in the middle, but the two warehouse wings, for lack of a better term, are very functional warehouse buildings,” Tassi said. “If (the merged IGT) is going to lease back those office buildings, I think that’s a slam dunk for any experienced industrial investor.”

Tassi said he could imagine an e-commerce or transportation company taking advantage of the IGT warehouse space, or another company could use it for light manufacturing.

A building sale would not be the only change in Nevada for the newly merged version of IGT. Sala said on the earnings call this week that the company has also executed a purchase and sale agreement involving 20 acres of “excess land” in Reno. And he said IGT has made “good progress” in shifting all of its North American manufacturing operations to Reno.

Competing company Scientific Games has gone in the opposite direction as IGT in Las Vegas. After acquiring slot machine maker Bally Technologies for $5.1 billion last year, Scientific Games announced in January that it was moving its corporate headquarters from New York to Las Vegas.

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