SAN DIEGO—As GlobeSt.com recently reported, locally based real estate investor and operator MG Properties Group has acquired two properties encompassing 722 units in the largest multifamily transaction in Reno's history. The firm's CEO Mark Gleiberman tells GlobeSt.com why Reno appeals to his company and what other markets are up and coming.

GlobeSt.com: What was unique for you about these two multifamily acquisitions?

Gleiberman: Part of it was the sales process. It was an auction process, which we felt limited the field of competitors significantly. It's unusual to have a deal that large at auction. Institutional players refuse to participate in the auction process, and many private groups find that size deal too big for them. But I think that the whole process really brought down the number of competitors, and pricing ended up being more favorable because of that. Also, for us to be able to add 722 units in Reno in one transaction was extremely appealing. In both cases, we fell there is a significant value-add play, and we plan to add about $12,000 in improvements per unit, which will further enhance rents going forward.

GlobeSt.com: What is appealing to your firm about the Reno market?

Gleiberman: We are very bullish on the Reno market. There is a tremendous amount of high tech moving into the area, including a Tesla battery factory that will ultimately bring 6,500 direct jobs. Even outside of Tesla, many companies are looking to Reno to grow and expand. Apple's already there and growing, and many high-tech companies now perceive Reno more and more as a good alternative to Silicon Valley. That market is great for growth and shared ideas, but it's very expensive, so many firms are looking to Reno. The same two-bedroom apartment that rents in Silicon Valley for $3,000 a month rents for $1,200 to $1,300 a month in Reno. We have properties in Silicon Valley as well, and it's amazing how rents have gone up over a very high start. There has been 10% rent growth, so affordability is still an issue there.

Also, there are major tax advantages in Nevada, and there's a very business-friendly environment there. There is great job growth anticipated there over the next five years.

GlobeSt.com: Are you considering other acquisitions in Reno?

Gleiberman: We would love to grow there and are looking to get a regional manager on the ground. It's a smaller market, so it's difficult to do that—there aren't many trades. We bought another property in Reno about three years ago, a 324-unit property near one of the properties we just acquired. So, while we didn't have a big presence there, we knew the market very well and had seen growth in the property we already owned there.

GlobeSt.com: What other secondary or tertiary markets are you eyeing for acquisitions that have positive fundamentals?

Gleiberman: We like the Las Vegas market as well, and I closed a deal this past Friday in that market. The logic there was that Las Vegas has lagged the other western markets and is just starting to take off. We also like the Inland Empire, and while rent growth has kicked in there, it has lagged behind L.A., the Bay Area and Seattle. The Bay Area has shot up significantly, we still like the areas that are more peripheral to the Bay Area. We recently bought in Tracy, Vallejo and Napa, where we feel rents are starting to pick up over the last year or two. We're trying to get those markets that have not seen a majority of their rent growth and are still earlier in the cycle. Portland is another market we feel very good about.