ACCESS LASVEGAS OCTOBER | NOVEMBER 2009
YOUR ACCESS TO THE LAS VEGAS MULTI-FAMILY HOUSING MARKET
Foreclosure Frenzy Now Leaking Into Las Vegas Apartment Market Even apartment buildings aren’t immune to foreclosures. Las Vegas apartment market analyst Michael Belnick said owners are facing some rough times with 6 percent of the buildings in default or foreclosure. More than 300 notices of default have been issued, he said. “When markets get this depressed, there are usually opportunities,” Belnick said. “And, yes, there are today and will be for a while.” Loans for apartment buildings, however, are a challenge and almost all of the deals are cash, Belnick continued. The biggest area to capitalize on is low-end fourplexes. Buyers are paying cash and rehabbing buildings and getting a 15 percent to 20 percent return, he said. The units are being rented because they are in great condition after they are refurbished, he added.
Overall, the economic slowdown and competition from the housing market are taking a toll on apartments. Occupancies dipped to their lowest levels in more than a decade, according to the research firm Applied Analysis. At the same time, average rents fell to where they were three years ago. Applied Analysis Principal Brian Gordon said a frail job market and price depreciation in the housing market have weakened demand for apartments. Las Vegas’ jobless rate was 12.3 percent in June. The firm said apartment complexes are reporting increasing delinquencies and evictions, a trend that isn’t expected to improve this year. By the end of June, the valleywide occupancy rate fell to 90.5 percent, down from 93 percent at the end of 2008’s second quarter. Over the past 10 years, the average occupancy rate has been 94.2 percent, according to Applied Analysis. Continued on Page 9