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HENDERSON, NV-The 420-unit Montego Bay Apartments here have changed hands for $50.1 million in an off-market transaction. The Kislak family of Miami acquired the complex from Terry Bean of Portland, OR. Located at 1050 Whitney Ranch Dr., the property is 95% leased and will be managed in-house.
Stephen Braun, a senior vice president with J. I. Kislak Inc., tells GlobeSt.com that an additional $650,000 will be invested in upgrades to the property. He envisions Montego Bay as a long-term hold, which would be between seven and 10 years, but says it could easily be sold sooner or held longer depending on the market.
"We go into a deal looking to hold; we're yield driven," says Braun, who expects an initial cash-on-cash return of 5%. He sees upside in rents, which are as much as $100 per month per unit behind some competitive properties in the immediate area.
The acquisition gives the Kislak family 1,200 units in three properties in the Las Vegas area, a number Braun says the company would like to build on. The deal was funded with a $38-million loan from Deutsche Bank. The loan is interest only for the first 10 years and carries a fixed interest rate of 5.71%.
The purchase price for Montego Bay works out to $119,300 per unit. In October, the 240-unit Napa Valley Apartments in Henderson changed hands for 136,000 per unit. Located near Interstate 215 at 1349 W. Horizon Ridge Pkwy., the 15-building, 13-acre property opened in 1998 and is 95% occupied.
The new owner of Napa Valley Apartments is an affiliate of RW Selby & Co., a Los Angeles-based multifamily investment firm that is active principally in Southern California and Nevada. In August, RW Selby paid $28.5 million for Rancho Serene Apartments, a 216-unit property in Las Vegas.
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