Home foreclosures, economic downturn fuel apartment demand

Las Vegas Foreclosure News & Information

BY TONY ILLIA

Demand in Southern Nevada's apartment market rose in the third-quarter, fueled by a rise in home foreclosures and a lack of new rental products, reports Applied Analysis, a local business advisory firm. Valley apartment occupancy rates were nearly 94 percent at the end of September, up 0.2 percent from a year ago. Average asking rents, meanwhile, were $890 per month or $7 more than 12 months ago.

"As overall demand appears to be on the rise, rent is expected to follow despite the difficult economic environment," Applied Analysis principal Brian Gordon said. "We expect continued volatility in the for sale market, tight capital markets, global financial uncertainty and low consumer confidence to press residences toward rent options."

Unemployment reached 7.34 percent in the third quarter, exceeding the national average of 6.1 percent, while 35 valley foreclosure occurred a day. The economic instability for working families, many of which are losing their homes, is creating greater demand for rentals. Yet tightening credit markets have curtailed the volume of new apartments expected to enter the valley in the next year. It's creating greater pent-up apartment demand, which, in turn, is fueling rent growth.

The southwest had the valley's highest third-quarter rents at $1,014 per unit; the northeast was lowest at $769 per unit. The strongest annual rent growth area was the north valley, which posted a 2.6 percent gain; the central/east submarket, by contrast, saw a negative 1.6 percent growth.

"The recent rise in occupancies provides some relief for landlords," Gordon said. "Pricing is unlikely to pull back. With only modest levels of new supply expected to enter the market in the coming year, fundamentals for market owners remain stable."

PROJECTS

Clark/Hunt Construction JV won a $364.9 million contract to build a seven-story, 790,000-square-foot veterans hospital with 90 patient beds and a 20-bed mental health facility in North Las Vegas. It's the largest contract ever awarded by the U.S. Department of Veterans Affairs. The 150-acre campus is bound by the Las Vegas Beltway, Pecos Road, Centennial Parkway and Lamb Boulevard. RTKL and JMA are the project architects. The facility is scheduled to open in mid-2011.

Roche Constructors is performing $46 million in upgrades to the 68-acre, 37-year-old Freedom Park at North Mojave Road and Washington Avenue in Las Vegas. The project includes construction of six baseball fields, a batting cage, an indoor sports pavilion and events area, two concession areas and two playgrounds. Other work consists of renovating two little league fields, building two new soccer fields, basketball courts, and a building for concessions and restrooms. The work will finish in 14 months.

Core Construction completed the $20.4 million, 66,112-square-foot O'Roarke Elementary School at 6002 S. Durango Drive in Las Vegas. The block-and-glass building, on 13.35 acres, features classrooms around a courtyard with playground and recreational facilities. JMA is the architect.

Tim Cashman and Don Andress recently opened a new 104,000-square-foot Red Rock Harley-Davidson store at 2260 S. Rainbow Blvd. in Las Vegas. Kalb Construction Co. was the contractor for the dealership, which stands on 2.5 acres and will employ 60 people. It marks the third Harley-Davidson dealership in Southern Nevada for Cashman and Andress.

MILLION-DOLLAR DEALS

VR Carson LLC bought a 150,222-square-foot office building and parking structure at 302 and 310 E. Carson Ave. in Las Vegas for $21.5 million, or $143 per square foot, from Carson Properties Nevada LLC. Grubb & Ellis' David Scherer, Barton Hyde, Michael Hsu and Matthew Kreft represented the seller.

The Learning Center signed a seven-year, $1.61 million lease for 12,141 square feet of office space inside Rainbow Corporate Center at 777 N. Rainbow Blvd. in Las Vegas. CB Richard Ellis' Randy Broadhead represented the lessor, Rainbow Corporate Center LP. The reported average rent equals $1.58 per square foot.

Kwan Family Trust bought the 6,550-square-foot Cameron Industrial Building, on 0.43 acres, at 5260 Cameron St. in Las Vegas for $1.075 million, or $164 per square foot, from Alice Roussos. Marcus & Millichap's César Talavera and Kristian Meier represented the seller.