Lure of Las Vegas
Of course, tight supply is appealing to investors, who continue to gamble on the Vegas market. Among the most active are Southern California firms and investors who can sell their B or C property for more than $200,000 per unit at a 4 percent or 5 percent cap rate, then reinvest in Las Vegas for between $115,000 per door and for a Class B or C garden complex up to $140,000 per door for Class A units, and anywhere from a 5 percent to 6.5 percent cap rate.
One company that is doing just that is Atherton-Newport. In the past few years, the Irvine, Calif.-based firm has acquired approximately 1,700 units in Las Vegas and has yet another property now in escrow. On the development front, this includes a 384-unit, low-rise, resort-style condominium project that will include two pools, courtyards, a fitness center, and clubhouse. The project will require the teardown of an old apartment community currently located on the 7.5-acre site, located on the corner of Swenson and Flamingo, several blocks off the Strip. New units will average 1,100 square feet. Hard costs for development will be in the $200 per square foot range. On the re-development front, Atherton-Newport has just completed and listed three properties: The 120-unit Sunset Hills and the 120-unit Arabella, both in Henderson, and the 516-unit Lantana on West Charleston Boulevard in western Las Vegas.
“Lantana was placed on the market in mid-July and within 10 days had received 35 to 40 calls requesting information packages,” said Khatana. “Investors who had forsaken this market are coming back and looking again. Lantana’s $50 million sale price is particularly attracting the larger players who because of the market are bullish here again.” Sounds like it’s time to roll the dice.
Considering the Las Vegas market? Here’s what you need to know:
- Population: 1.8 million
- Occupancy: 96%
- Median Age: 34.5 years
- Median Household Income: $47,097
- Average Rent: $708 for a one-bedroom, $870 for a two-bedroom
- Unemployment: 3.7%
Notable: Founded in 1905. Has an average of 320 sunny days annually. Almost 50 percent of Las Vegas’ electric power is used by residential air conditioning. Backdrop for hit CBS series “CSI: Crime Scene Investigation.”