LAS VEGAS-S N I P Renaissance LP has sold Renaissance Villas Apartment Community, an 840-unit complex at 5419 W. Tropicana Ave. here, to Riverview Development XVIII LLC for $74,750,000 million. The sale represents the largest single multifamily property to change hands in the Las Vegas market since 2007.
Lloyd Sauter and Patrick Sauter of NAI Sauter Cos. served as investment advisor and broker on the transaction for both the buyer and seller. Patrick Sauter tells GlobeSt.com, “The property was built in 1988, and the buyer’s plan is to continue to manage it as is and benefit from the continuing recovery in Las Vegas.” The class-B property is 95% occupied.
The apartment market in Las Vegas appears to be on the road to recovery after hitting bottom last year. Industry sources reported in February 2011 that the Las Vegas market ranked next to last in a national apartment index compiled by Marcus & Millichap. According to the firm’s 2011 national apartment report, gradual recovery in the gaming industry was expected to strengthen apartment operations in 2011, but elevated vacancy rates and modest rent growth kept the area near the bottom of the index.
NAI Sauter reports that Las Vegas saw 40 apartment complexes trade hands (not including foreclosures) in the first 6 months of 2012, totaling 4,561 units, with a total value $153.5 million—an 81% increase in transactions over the second half of 2011. The average price per unit also increased approximately 32%, from $25,500 to $33,654, which is attributed to an increase in demand and the sale of several larger, better quality assets.
According to David Baird, national director for multifamily for Sperry Van Ness, vacancies have stabilized at about 10%, and rents, while flat, are beginning to rise. Little construction has led to increased investor demand for the few available properties, he tells GlobeSt.com. “There’s not a lot to choose from, but we’re still a concession-ridden market. The market has suffered and has been in the depths, and when it comes back, the recovery will be fast and strong. Multifamily product out there is reasonably priced and will go really quick.”
Baird gives the example of an apartment building he sold a month or so ago, which garnered 14 offers in two weeks and sold for 10% over list price.
The Las Vegas market is continuing its recovery in other sectors as well. As GlobeSt.com previously reported, DoubleTree by Hilton and the New Tropicana Las Vegas have signed a strategic franchise agreement that marks the return of the Hilton Worldwide brand to the Las Vegas Strip after an almost 14-year absence. Under the terms of the franchise agreement, Tropicana Las Vegas will continue to own and operate all 1,600 guest rooms in the 35-acre resort, which recently completed a $200-million comprehensive transformation.
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