WMC takes on new investor
By Clint Engel -- Furniture Today, January 26, 2004
LAS VEGAS — Developers of the World Market Center have taken on a new investor and development partner with the kind of financial muscle and large-project expertise they say will speed up future-phase construction of the planned $1 billion home furnishings trade show complex.
WMC is partnering with The Related Cos., a New York-based real estate powerhouse that is now overseeing construction of the Las Vegas project and taking the lead in arranging financing for future phases, said Jack Kashani, a principal in the development.
While Related has no furniture or market building experience, Kashani said it has "demonstrated the ability to manage and deliver on time and on budget large-scale projects."
The company has an extensive property management background and will have a joint role in managing the facilities.
Related has become an investor in the project, along with companies controlled by Kashani, Shawn Samson and the Alliance family, but the size of the Related stake was not disclosed. Samson said it was "significant" but would not say whether Related has become the lead investor.
Samson and Kashani will continue as managing partners, along with Related.
Samson said WMC developers always had planned on expanding its capital base, but accelerated that plan because tenant interest created an immediate opportunity. Related can help speed up construction to meet that demand.
The 1.3 million-square-foot, first-phase has yet to come out of the ground, but Samson said the WMC will obtain a building permit this week and will pour the foundation for the first phase this month. Steel has been ordered and construction of the building's shell is expected to be under way this quarter, he said.
The 10-level market building is scheduled to open for its first furniture market in July 2005.
"Construction on the first three phases, which are the core permanent showroom buildings in the project, has been condensed," Samson said.
He said construction on the second building should now begin in 2005 before the first phase is open, rather than afterward. Phase 3 also could be built concurrently.
Related Cos. is one of the United States' largest property developers with a diverse portfolio of projects in metro New York, Chicago, Florida, Nevada and California. One recent project is the nearly completed, 2.8 million-square-foot Time Warner Center in Manhattan, a $2 billion project.
Related says its Financial Services division is the nation's largest sponsor of real estate debt and equity investment programs, and that it also is the largest owner of multi-family U.S. residential properties.
Marty Burger, Related executive vice president, will be lead principal on the WMC project. He called it a "fantastic opportunity," and said the fact the first phase is fully leased before construction is unusual for a multi-tenant project.
"The demand speaks for itself," Burger said. "The feedback I got from the tenants is we can't build this quick enough for them."
He said the company typically builds 10 to 12 buildings a year, and "for the most part they are on time and on budget."
Related entered the alliance with WMC alliance in early December, he said.
Burger and WMC representatives recently returned from the Heimtextil fabric show in Frankfurt, Germany, where they promoted the Las Vegas complex as a new home for a future fabric fair.
The WMC said in a statement that it plans a market, separate from the home furnishings show, for the "international textile and hospitality contract industries." Samson said this has long been part of the plan for the 1.5 million-square-foot World Trade Fair phase, with the first fabric fair probably sometime in 2006.
Samson said the fair won't conflict with the WMC's planned July and January furniture markets. He said he doesn't consider it competition for High Point's Showtime fabric fair.
"We don't see any of our markets as positioned to compete with other existing markets," he said. "Rather, we see our initiatives as being oriented toward the international community, and we believe that is a missing opportunity in the markets in the U.S."
