ACRES Capital, GSP Continue Secondary Market Investment Trend

The two firms are partnering to a $37.5-million loan to fund the construction of The Watermark a mixed-use multifamily property featuring luxury rental units, retail and office space located in downtown Henderson, NV.

HENDERSON, NV—ACRES Capital Corp., a commercial real estate middle-market lender, and George Smith Partners, a national provider of capital market services to the commercial real estate industry, have partnered to provide a $37.5 million loan to fund the construction of The Watermark a mixed-use multifamily property featuring luxury rental units, retail and office space located in downtown Henderson, NV a suburb of Las Vegas.

The complex is anticipated to help provide housing for Henderson’s expansion. It was Nevada’s fastest growing city in 2017 and 2018.

ACRES Chief Executive Officer and President Mark Fogel said The Watermark is coming at an ideal time to accommodate Henderson’s significant demand for rental units.

Henderson’s need for more residential units is being fueled in part by Google’s new $600 million data center, which is projected to bring 200 new technology-industry jobs to the city; Henderson Hospital’s $150 million expansion and planned Phase 2 renovation; and the newly constructed Las Vegas Raiders Headquarters and Intermountain Healthcare Performance Center.

Additionally, Haas Automation plans to relocate to a 2.4 million-square-foot facility in Henderson in 2022, bringing more employment opportunities to the area.

The Watermark will contain 151 residential rental units and accompanying parking spaces, as well as 9,928 square feet of retail space, 14,725 square feet of restaurant space and 11,923 square feet of office space. The class A, luxury Property will be in Downtown Henderson’s Water Street District, which is currently undergoing a revitalization that will include a 500-seat canopied amphitheater and 60,000 square feet of programmable deck area.

Henderson is one of the secondary locales in the nation that should outperform the national average for commercial real estate investors as the pandemic has driven activity from dense urban cores, Marcus & Millichap reported earlier this year.

“This trend (toward investing in secondary and tertiary markets) has been advancing for the past 20 years but it has accelerated since the onset of the pandemic,” John Chang, senior vice president of research services at M&M recently said. “The recent acceleration of the trend may be tied to the pandemic, which has boosted migration from primary metros to smaller cities. Investors are simply following the migration.”