The trick is finding the inventory to meet that demand.”īillions of dollars of institutional investment money, low interest rates and unparalleled demand to deploy capital out of California and into Nevada has created a perfect storm for owners of multifamily apartment complexes.īen Nelson, first vice president of investments with Kidder Mathews, said numerous potential investors are 1031 exchange buyers - investors who sold multifamily properties elsewhere and need to invest sale proceeds into “like-kind” assets in order to avoid paying stiff capital gains taxes to the IRS. As for investments, there are billions of dollars that need to be deployed out of California and into Nevada for tax reasons. “All these new high-end properties are stabilizing very quickly. “We dropped almost an entire point on vacancy despite delivering units as fast as we can,” he said. The numerous large Class A apartment projects coming online on seemingly every formerly vacant lot in the region are leasing almost as fast as units are completed, Stoever said.Īccording to county records, Northland acquired the Lumina at Spanish Springs property for $100 million. Solid multifamily market fundamentals - high and stable occupancy and regular rental appreciation - have created fierce competition for investment opportunities, said Ted Stoever II, executive vice president of investments with Kidder Mathews in Reno.Īccording to Kidder Mathews’ first-quarter multifamily market report, average rents across all property types and sizes rose 3.16% to $1,424 per unit, with overall market vacancy dipping just south of 2%. The company joins a crowded playing field with dozens of other private and institutional investors seeking to deploy investment capital in multifamily properties in Greater Reno-Sparks, two longtime regional investment brokers say.
Resources aside, it could prove difficult for Northland to deploy additional capital in Northern Nevada. Strategically, we are first and foremost an owner/operator, so with our long-term investment horizon, we typically try to find economies of scale by building a larger footprint.” “We will use this (purchase) to hopefully find some more opportunities to grow the portfolio and continue to expand our operations (in Reno-Sparks). We swung and missed on a couple of deals, but we were able to plant our flag with Lumina. “Reno has been on our radar for a few years. “When we started looking at cities, (we look at) basic metrics like affordability, lifestyle and job opportunities - inward job migration is always huge - and Reno checks those boxes,” Campbell said. Lumina is the company’s first investment in the Northern Nevada multifamily market, but it likely won’t be its last, Campbell said.
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