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Nevada buys former Harley Davidson building as part of plan to own more office space

Acquisition of former Harley Davidson building part of effort by state of Nevada to switch from leasing to owning its office buildings.

The state of Nevada is buying the former Harley Davidson building in Carson City — part of an effort by the Lombardo administration to have the state own its office buildings instead of leasing them.

The building at 3850 Arrowhead Drive housed Harley Davidson Financial Services until Las Vegas-based CAI Investments bought it in January 2021 for $3.8 million.

In a sale expected to close next month, the state of Nevada bought the 96,000-square-foot building from CAI for $18.5 million. The Reno Gazette Journal confirmed the sale through multiple sources familiar with the deal.

“It’s a great acquisition,” said CBRE First Vice President Matt Grimes, who represented CAI in selling the property. “(The state) purchased it well below replacement cost.”

Replacement cost refers to the amount needed to build a similar building while factoring in the price of land and today’s construction costs.

Why is Nevada buying the former Harley Davidson building

The pending purchase is part of Lombardo’s push to acquire new office spaces for state employees.

The state leases about 2.1 million square feet of space, with a good chunk of the payments going to companies outside Nevada, Jack Robb, administration department director, said when reached by phone on Monday.

“We’re purchasing (properties) to try and relieve ourselves of some of those leases,” Robb said.

“Instead of leases going to non-resident corporations, we can keep that money within the state of Nevada and save state agencies money. We’re saving millions of dollars.” 

In his State of the State address in January, Lombardo mentioned including funding in his capital improvement budget for refurbishing existing buildings as well as money for three new state office buildings.

“State employees also deserve a safe and pleasant working environment,” Lombardo said in his address. “Of the last three major state office buildings constructed, one has been torn down, the other is getting the roof replaced, and the Grant Sawyer Building needs major rehabilitation.” 

Last May, Lombardo announced a plan to buy 835,000 square feet of office space for $263 million at the McCarran Center near Harry Reid International Airport in Las Vegas. The governor’s office claimed purchasing new office space would be cheaper than remodeling the Grant Sawyer State Office Building, which would cost $470 million for less space —  about 470,000 square feet.

“We are looking at this as a long-term investment to both save money and get our employees into better and new accommodations that help recruit and retain employees,” Robb said. “This is a wholesale change on how the state does business.”

Why did CAI Investments decide to sell the former Harley Davidson building?

CAI Investments considered two options for the property when it first acquired the former Harley Davidson building in 2021.

“The plan was to sell or lease the property to whoever came along,” Grimes said.

CAI Investments CEO Chris Beavor called the state a natural fit for the property.

“We decided it was a great asset at the capital and looked at targeting the state as a potential buyer,” Beavor said. “We’ve been working with the state for a couple of years.”

The building is adjacent to several existing facilities and allows the state to have a three-building campus at the location, according to Grimes. Health and Human Services and Division of Public and Behavioral Health offices are next to the property.

“It’s Carson City, it’s the state capital,” Beavor said. “It’s one of the nicer buildings in Carson City.”

CAI Investments also recently sold its ownership stake in the Reno City Center project. The Reno City Center is undergoing a major mixed-use remodel of the former Harrah’s Reno hotel-casino.

View Reno Gazette-Journal News Article

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