(Read more on the multifamily market.)
LAS VEGAS-The Siegel Group on Thursday acquired the Falls apartment complex near the University of Nevada here for $14.75 million and promptly reflagged it Siegel Suites Cambridge. The 230-unit, 4.8-acre property on South Cambridge Street is the 10th property to join the company's 2,500-room, Vegas-area chain of hotel-apartment hybrids it calls “flexible-stay” properties.
Last week, the company paid $13.75 million for Coliseum Villas, a 186-unit, 3.64-acre property near the corner of Paradise Road and Twain Avenue, across the street from the Wynn Las Vegas golf course and about one mile from the Falls apartments. Next month, it will close on the 225-unit Emerald Suites hotel on Tropicana Avenue, just west of Interstate 15.
Siegel Group president/CEO Stephen Siegel tells GlobeSt.com that most of the properties it acquires are at least 20 years old and are suffering from deferred maintenance and poor management. Once acquired, the properties are quickly rebranded and renovated. Siegel says he is typically able to make the properties cash-flow positive within 90 days.
“We put our business model on land we think will appreciate quickly,” Siegel says. “Most of our properties are close to Downtown, the Las Vegas Strip and the Boulder Highway corridor.”
Indeed, the City of Las Vegas' effort to revitalize its core has increased land values Downtown while the massive developments under way on Las Vegas Boulevard and its connector streets have spiked values in that area, and the rapid transit system being planned for the Boulder highway Corridor is improving land values along that route, which connects Las Vegas to Henderson.
The Siegel Suites brand was launched in 2005. Stephen Siegel says his goal is to have between 10,000 and 12,000 units in its portfolio, which would make the company by far the largest flexible stay operator in the region.
The Siegel Suites business model provides furnished and unfurnished units, allows guests multiple payment options and does not require they sign long-term lease commitments or handle their own utilities. The chain's average tenant stays for about four months, Siegel says.
A furnished one-bedroom unit typically rents for between $189 and $269 per week. Siegel says he will be adding high-speed Internet access to each of the properties in the coming months as well as Web TV and DVD options. Sasco Properties, an affiliate of the Siegel Group, will operate the properties.
“They can pay by the week or by the month,” Siegel says. “It's all about 'no commitments'.”
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