Only six apartment developments larger than 100 units changed hands in the first three months of the year and only three changed hands in the second quarter, according to Real Capital Analytics. That brings the total number of plus-100-unit apartment sales through the first half of 2008 to nine. In 2007, 12 plus-100-unit properties changed hands in the first three months of the year, according to research by local apartment broker Michael Belnick.

A recent report by apartment specialist H&P says part of the reason for the slowdown is that lenders are underwriting off of actuals and not pro forma, and are requiring larger down payments. Fears related to the problems in the single-family market and falling NOI have resulted in a significant bid-ask gap. Despite that, prices and cap rates for Las Vegas assets have seen little change in recent months, hovering between 5.5% and the mid-6.0% range, according to H&P.

A first quarter report on the apartment market by Applied Analysis, a local business research and advisory firm, found that while sales have slowed occupancy was up slightly during the first quarter along with rental rates. The locally based business research and advisory firm reported that after six consecutive quarterly decreases, average occupancy increased to 92.7% from 92.3% at the start of the year. In the first quarter of 2007, average occupancy was 94.1%. In addition, it said the average asking rent rose 1.8% over the last 12 months—albeit the slowest growth rate since the beginning of 2004—and now stands at $888 per unit per month.

Those kinds of positive occupancy numbers in an otherwise dreary economy—and the fact that tens of thousands of new temporary and permanent jobs are being created by the $30 billion of resort development currently under way on the Las Vegas Strip—has developers preparing for new apartment projects despite the lack of a for-sale market. Most of the work is occurring around the Interstate 215 beltway, however, and most of it won't be coming to market until 2010 or later.

H&P is forecasting that new apartment deliveries will slow to 2,300 units this year—from 2,725 units in 2007—and that approximately half of the units will be absorbed. In 2009, H&P is expecting no new significant apartment deliveries and 1,600 units of absorption.

One of the projects coming online in 2009 is Alexan Russell Lofts, a 168-unit project here that is being funded by Behringer Harvard and developed by Trammell Crow. The development site is located on the north side of Russell Road, west of Galleria Drive.

Alexan Russell Lofts will offer apartments averaging 973 sf. The asking rental rate will range from $900 to $1,400 per month, depending on unit size, layout and location. Common area amenities will include a fitness facility, barbecues, and a resort-style pool and spa. Project completion is slated for late 2009.

"In spite of national economic challenges during the first quarter of this year, Las Vegas has continued to show strong population growth and median household income above the U.S. average," says Behringer Harvard SVP Mark Alfieri.

One of the properties coming online this year is another Behringer-funded, Trammell-built development, Alexan Black Mountain, a 213-unit project in the suburb of Henderson. Being built for Behringer Harvard Opportunity REIT I, the development sits on a thin, 11-acre strip of land between I-515 and Conestoga Way, within walking distance of a proposed 600-acre campus for Nevada State College and a planned regional light rail line.

The other Behringer-based project TCC is developing in the Las Vegas Valley is Alexan St. Rose, a 430-unit project on 26 acres located immediately northeast of the confluence of Maryland Parkway and St. Rose Parkway. That project also has been slated for completion in 2009.

In May, Behringer Harvard bought into Alexan Prospect, a 400-unit TCR development in Central Platte Valley, a 120-acre former industrial area immediately west of the Denver CBD being redeveloped into a mixed-use urban neighborhood. Behringer Harvard Multifamily REIT I, in partnership with a Dutch pension fund, acquired a 50% stake in the $95-million project, which according to SEC documents is expected to provide all partners a preferred return of 14%.