Why Apartment Investors Expect Long-Term Growth in Las Vegas
Next Wave has acquired its 10th apartment property in the market, a sign of the firm’s bullish outlook on the market.
“Las Vegas was the first market in which Next Wave invested, and we continue to see strong opportunity in its long term trajectory based on ongoing economic growth in the region,” Jordan Fisher, Principal at Next Wave Investors, tells GlobeSt.com. “The city’s workforce has expanded by 1.4% in the past 12 months and Clark County posted the second-largest population increase of any U.S. county between 2017 and 2018—all of which is fueling demand for well-located, well-amenitized multifamily product.”
Market growth and new entertainment infrastructure is driving the market growth. “This activity is driven by major construction projects such as Raiders Stadium, the new convention center, resort developments and new distribution centers, all of which support continued expansions in construction, transportation and tourism sectors,” says Fisher.
The firm is implementing a value-add investment strategy on its most recent purchase. “We plan to implement a series of capital upgrades including exterior paint and signage, new landscaping, interior unit enhancements, pool area improvements, and the addition of new community amenities including collaborative outdoor BBQ and gathering spaces,” says Fisher.
Villaggio Di Murano fits perfectly in the firm’s investment strategy for the market. “The property fits squarely within our investment thesis. Built in 2005, the asset was well maintained by the seller and remains in its original classic condition, giving our team a tremendous opportunity to create deep value by implementing thoughtful renovations while also adding in-demand amenities,” says Fisher.
As a result, the property is poised to benefit from long-term growth and the overall growth in the market. “It is strategically located to benefit from Las Vegas’ economic growth and strong housing demand. Situated in the sought-after Spring Valley submarket, the property is in close proximity to newly built parks, sports fields, schools, and retail offerings—all of which will contribute to long-term renter demand,” says Fisher.
Next Wave plans to continue to expand its presence in the market, and this acquisition was part of its broader expansion plan to gain market share. “We see this acquisition as an opportunity to deepen our presence as an owner in Las Vegas and benefit from increased economies of scale while delivering continued long-term value for our firm and our investors,” explains Fisher.
While expanding market presence is never easy, Next Wave has seen an increase in opportunities lately. “In Vegas, there is an uptick in off-market transactions, through which investors can acquire at a discount to replacement cost,” says Fisher. “Las Vegas offers an average asset appreciation of 13.29%, supporting steady rent growth while maintaining a rental ratio that is sensible for residents. The average rent in this market is $1,073 per month—much lower than the national average of $1,472 per month. Renters here are spending only 21.7% of their income on rent, keeping them well below the 49.7% of American renter households that are considered cost-burdened based on spending more than 30% of household income on rent.”