Yet as the market continues to work out those kinks, there arepromising signs for Sin City's multifamily sector. Locally basedbrokerage firm Bentley Group Real Estate Advisors reportsperformance figures for the local apartment market for the secondquarter trended toward the positive, albeit slightly. Occupancyrose 20 basis points, following a 40-basis-point increase in thefirst quarter. At 92.9%, the midyear occupancy just shy of the93.7% reported in the second quarter of 2007. Rents, meanwhile,rose by 1% over the quarter to $889 per month.

However, small, the gains are still good news, says ChristopherD. Bentley, president and broker of record for the firm'smultifamily/hospitality division. "Since 2006, the shadow market ofsingle-family homes has really affected apartment performance. It'saffected occupancy growth significantly. But if you take rentgrowth, then performance was flat," he explains, adding thatvalue-add buyers that upgraded C and D-quality product have helpedpush overall rents up. "So things have remained flat throughout2006, though they haven't decreased. And 2007 was a bad year forus. We ended up with employment growth of just 9,000, compared tothe 40,000 we're used to. This year isn't going to be muchdifferent."

Bentley notes that there's no way to accurately quantify thesize or full impact of the shadow market since it's difficult todetermine how many single-family homes are on the market asrentals. According to data from the Bentley Group, just 19% of theLas Vegas housing market consists of traditional rentals. "Other"rentals¬--single-family residences, condos and townhomes--accountfor 21% of the pie and owner-occupied households comprise thebalance.