Reno-Sparks apartment construction gains momentum — yet, rents continue to rise
This story is publishing in the January, 29, 2018, edition of the Northern Nevada Real Estate Journal, a quarterly publication of the Northern Nevada Business Weekly.
Major multifamily construction in Reno-Sparks
Vida: 312 units at Sharlands and Mae Anne in northwest Reno
The Bridges: 198 units in Victorian Square
North Peak Apartments: 328 units at Military Road & Lemmon Drive in North Valleys
Lumina-Phase I: 330 units in Pioneer Meadows in Sparks
Vineyards at the Galleria: 210 units at Sparks Galleria in Spanish Springs
The Waterfront at Sparks Marina: 209 units in Sparks
Lyfe at the Marina: 280 units in Sparks
Sierra Vista: 336 units at Arrowcreek Parkway in southwest Reno
The Harvest-Phase I: 278 units in Damonte Ranch, Reno
The Village South: 252 units at Arrowcreek Parkway & Wedge Parkway in southwest Reno
Latitude 39: 148 units east of Double R Parkway in southeast Reno
Summit Club: 581 units on Mt. Rose Highway, southwest Reno
The Harvest-Phase II: 300 units in Damonte Ranch, southeast Reno
Total: 3,762 units
Apartment sales in Reno-Sparks
Lakeridge West: 126 units sold for $19.5 million
Woodside Village: 250 units sold for $27 million
Verona: 152 units sold for $20.45 million
3rd Street Flats: 94 units sold for $18.6 million
Northtowne Summit: 220 units sold for $34.4 million
Edgewater at Virginia Lake: 288 units sold for $57.3 million
*Comstock Hills: 276 units sold for $43.5 million
*Hillview: 294 units sold for $46.5 million
Lincoln Garden: 128 units sold for $11.27 million
*Comstock Hills and Hillview were purchased by the same buyer and have been rebranded The Verge.
Source: Johnson | Perkins | Griffin Real Estate Appraisers & Consultants
Almost anywhere you drive in the Truckee Meadows, you can see apartment complexes rising from bare ground and cracked parking lots.
An estimated 3,762 units are currently under construction, while 6,209 units are in various stages of the planning process.
But it will still take years before new construction makes a dent in demand that has pushed the region’s rents up faster than most areas in the nation.
“I think, definitely, we’ll continue to see rents creeping up slowly,” Sarah Fye, appraiser intern for Johnson Perkins Griffin Real Estate Appraisers & Consultants (JPG), told the Northern Nevada Business Weekly in a recent interview.
Fye was in the process of compiling JPG’s fourth quarter 2017 apartment report. Final numbers were not yet available by this story’s deadline, but she expected the report to be similar to the third quarter when rents had increased about 2.5 percent and the vacancy rate hung below 3 percent.
New apartment buildings have been opening in the market for a few years now, from completely new construction, to old hotels receiving new life as urban apartments.
Yet, rents continue to rise.
“Those properties haven’t affected the market,” Fye said. “Expect newer properties to continue to be absorbed. I don’t think (construction) is happening fast enough to keep up with the job growth.
“We’re just shy of 4,000 units under construction. We’ll see them come online in two years, then it will start to help. It’s going to take time. We’re not going to see (relief) anytime soon.”
The construction industry is also keeping a close eye on the tug-of-war between new construction and growing demand.
“Multifamily homes are going up like crazy,” said Aaron West, CEO of Nevada Builders Alliance. “We are seeing significantly more multifamily construction: 2,700 units permitted this year (2017), compared to 1,700 to 1,800 last year (2016).”
Nevertheless, the demand for apartments has also increased as younger generations enter the housing market. Younger people often don’t have the resources for a down payment, and even when they do, many prefer to rent, he said.
“Their lifestyle decisions are such that maybe they don’t want to buy,” West said. “They want to be flexible enough to travel or enjoy more entertainment.”
With changing demographics as well as population growth increasing the demand for apartment units, some developers — who in the past have focused on single-family construction — are adding additional multifamily products to their development projects.
Reno Land Inc. is one of those companies. Among its projects currently under construction or planned, Summit Club off Mt. Rose Highway, has 584 units under construction with 20 percent set aside for workforce housing.
Meanwhile, the Park Lane project on the long-empty site of the demolished Park Lake Mall broke ground midyear 2017. It will include 1,619 apartment units along with retail, dining, open space and entertainment at the south end of Reno’s Midtown. In Fernley, Reno Land is constructing a 200-unit multifamily complex.
Carson City is also seeing multifamily construction pick up. In recent months, approved projects include 105 townhouse units for the Mills Landing project off Highway 50 East; 147 townhouses for Arbor Villas off South Roop Street; Carson Hills Apartments, a 300-multifamily-unit project behind Casino Fandango; and the 150-unit Villas at Silver Oak project behind Glen Eagle’s Restaurant & Lounge.
Further, there are rumors that Ryder is looking at taking on a 300-unit apartment complex in Carson City, West said.