Built in the late 1970s and early 1980s, the two complexes arelocated a few blocks of each other. Casa De Alicia is a 50-unitcomplex with 39,009 rentable sf on 2.74 acres. The other, M&MII, is a 56-unit complex with 35,024 rentable sf on 3.1 acres. Theproperties offer one-, two- and three-bedroom units ranging in sizefrom 617 sf to 994 sf. Rent and occupancy was not immediatelyavailable.

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As the only Nevada city with no gaming, Boulder City is a stablecommunity popular with families. Mitchell Mondry of the Birmingham,MI-based M Group Inc., a principal in the acquiring investmentgroup, says the lack of gambling and restrictions on new apartmentdevelopment "made the properties an attractive investment."

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The buying entity, M&M Boulder City Apartments LLC, includesthe principals of Broder & Sachse Real Estate Services Inc., acommercial, residential and industrial property management anddevelopment company based in Birmingham, MI, and members of M GroupInc., a real estate acquisition and development company also basedin Birmingham. Richard Broder says the acquisition is part of alarger effort by the two firms to better diversify their holdingsgeographically.

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Only two apartment complexes sold in June in the Las VegasValley, according to Real Capital Analytics. The other, whichGlobeSt.com reported on earlier this week, was the 304-unit PyramidApartments in North Las Vegas. Heritage Associates of San Franciscoacquired the property from National Commercial Ventures of LosAngeles for $30.25 million or $99,507 per unit.

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

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

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A first quarter report on the apartment market by AppliedAnalysis, a local business research and advisory firm, found thatwhile sales have slowed occupancy was up slightly during the firstquarter along with rental rates. The locally based businessresearch and advisory firm reported that after six consecutivequarterly decreases, average occupancy increased to 92.7% from92.3% at the start of the year. In the first quarter of 2007,average occupancy was 94.1%. In addition, it said the averageasking rent rose 1.8% over the last 12 months—albeit the slowestgrowth rate since the beginning of 2004—and now stands at $888 perunit per month.

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Those kinds of positive occupancy numbers in an otherwise drearyeconomy—and the fact that tens of thousands of new temporary andpermanent jobs are being created by the $30 billion of resortdevelopment currently under way on the Las Vegas Strip—hasdevelopers preparing for new apartment projects despite the lack ofa for-sale market. Most of the work is occurring around theInterstate 215 beltway, however, and most of it won't be coming tomarket until 2010 or later.

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

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One of the projects coming online in 2009 is Alexan RussellLofts, a 168-unit project here that is being funded by BehringerHarvard and developed by Trammell Crow. The development site islocated on the north side of Russell Road, west of GalleriaDrive.

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

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

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One of the properties coming online this year is anotherBehringer-funded, Trammell-built development, Alexan BlackMountain, a 213-unit project in the suburb of Henderson. Beingbuilt for Behringer Harvard Opportunity REIT I, the developmentsits on a thin, 11-acre strip of land between I-515 and ConestogaWay, within walking distance of a proposed 600-acre campus forNevada State College and a planned regional light rail line.

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The other Behringer-based project TCC is developing in the LasVegas Valley is Alexan St. Rose, a 430-unit project on 26 acreslocated immediately northeast of the confluence of Maryland Parkwayand St. Rose Parkway. That project also has been slated forcompletion in 2009.

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In May, Behringer Harvard bought into Alexan Prospect, a400-unit TCR development in Central Platte Valley, a 120-acreformer industrial area immediately west of the Denver CBD beingredeveloped into a mixed-use urban neighborhood. Behringer HarvardMultifamily REIT I, in partnership with a Dutch pension fund,acquired a 50% stake in the $95-million project, which according toSEC documents is expected to provide all partners a preferredreturn of 14%.

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