California investors buy Las Vegas apartment complex for $50M

Tower 16 Capital Partners bought the 512-unit Foothill Village, 6255 W. Tropicana Ave. in Las Vegas, in a joint venture with Henley USA for $50 million. (Anton Communications)
Tower 16 Capital Partners bought the 512-unit Foothill Village, 6255 W. Tropicana Ave. in Las Vegas, in a joint venture with Henley USA for $50 million. (Anton Communications)
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Southern California real estate investors acquired a Las Vegas apartment complex for $50 million.

Tower 16 Capital Partners announced Friday that it bought the 512-unit Foothill Village, 6255 W. Tropicana Ave. at Jones Boulevard, in a joint venture with Henley USA.

The sale closed June 28, property records show.

Tower 16, based in Carlsbad, California, said it will oversee nearly $7 million in renovations and upgrades at the complex, which has three swimming pools, two basketball courts and other amenities.

The property is now called Altura on Tropicana. Clark County records indicate it was built in the 1970s and 1980s.

Henley is based in the United Kingdom and has U.S. offices in the Boston area, Florida, and Newport Beach, California.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

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Las Vegas Chinatown complex sticks out from other new rentals

The Breathe floor plan at Lotus apartment complex on Spring Mountain Road near Valley View Boulevard Monday, May 25, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
The Bamboo floor plan at Lotus apartment complex on Spring Mountain Road near Valley View Boulevard Monday, May 25, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
The view the under-construction rooftop sky-lounge at Lotus apartment complex on Spring Mountain Road near Valley View Boulevard Monday, May 25, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Lotus apartment complex on Spring Mountain Road near Valley View Boulevard Monday, May 25, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
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Compared with other apartments popping up in Las Vegas, developer Jonathan Fore’s new project is in a location that is different than most.

The Strip is a mile east of his complex, Chinatown’s numerous eateries are just to the west, and its closest neighbors include an empty, graffiti-covered former strip club.

Fore is also charging pricey rents at his project, Lotus — and the building has drawn plenty of tenants.

He said last week that the 295-unit luxury complex at 3616 Spring Mountain Road is 49 percent leased. Units are opening in phases, and Fore said the last batch will be ready in September.

Amenities include a rooftop deck, a poolside DJ booth, a karaoke room, a virtual-reality sports room, and 8,000 square feet of ground-floor retail space that is slated to have three restaurants.

“Life is better in the Lotus position,” its website proclaims.

Las Vegas’ apartment-construction boom is heavily concentrated in the suburbs, where it’s easier and cheaper to build. Lotus, however, is part of a small but growing tally of rental projects in urban, more centrally located areas.

Fore, managing partner of Fore Property Co., has another one on the drawing board. He said he plans to break ground in October on a six-story, 293-unit complex on Twain Avenue just north of the Rio.

At Lotus, Fore said, the average apartment is 880 square feet, and tenants are paying an average of about $1.92 per square foot. That amounts to about $1,690 per month. By comparison, the average rental rate in Las Vegas is $1,003, according to Reis Inc.

Fore acknowledged he is charging a steep price, but, citing the lack of competition being built nearby, said he’s renting an average of about 11 units per week.

“There really hasn’t been anything new built here in the last 30 years,” he said.

His tenants include workers on the Strip, pilots and flight attendants, and Californians who visit Las Vegas frequently.

Las Vegas’ apartment market has heated up in recent years. Rents are climbing faster than the national average, the vacancy rate is among the lowest in the country, and investors are snapping up properties throughout the valley.

Suburban development is seen as a less risky venture, as developers have repeatedly shown they can sign tenants and fetch certain rents. In urban areas, the rental rates probably would have to be higher to make projects financially feasible, but there is little of a recent track record.

According to Fore, investors and lenders for suburban projects can go to their investment committees, “point at the deal next door” and say theirs will work because the other project is landing certain rents. For Lotus, he added, there was nothing to compare to.

Still, he figured he would rather have “300 units amongst myself” in the Chinatown area than “300 amongst 3,000 on the (215) Beltway.”

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

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Las Vegas pool builders ‘extremely busy’ amid construction boom

The Las Vegas Strip is seen as a swimming pool is under construction by Poolscapes in a new house in Southern Highlands on Tuesday, July 3, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye

Driving around Las Vegas, it’s easy to see the housing tracts, apartment buildings and other projects coming out of the ground.

But in backyards across the valley, something else is being built at a rising clip: swimming pools.

“All the pool builders I know are extremely busy,” Vintage Pools owner Gary Verbano said.

Last year, 987 permits were issued for pool projects in unincorporated areas of Clark County, along with 633 in Henderson and 157 in North Las Vegas. Those tallies have all more than doubled since 2012.

Efforts to obtain city of Las Vegas figures for that timeframe were unsuccessful.

The number of swimming pools dug out of the desert remains well below the peaks of the mid-2000s housing bubble. But after tanking during the recession, business has climbed in recent years amid more home construction and the improved economy, Las Vegas pool builders said.

Renaissance Pools & Spas owner Jim Alexander said he built 600 pools in 2004 but only about 50 annually during the recession. He expects to build more than 200 this year.

He said new builders are getting into the business and others who bailed years ago are returning.

“If the economy wasn’t strong, they wouldn’t be coming back in,” Alexander said.

Poolscapes owner Ivan Friedmutter said he expects this year to be his best ever and noted that pool construction isn’t the only aspect of the economy that’s picking up. Among other things, car sales, airport passenger traffic and gambling revenue are also rising.

“Everything’s a little busier,” he said.

Paragon Pools founder Joe Vassallo said most of his projects are at new houses and that pool construction usually climbs when homebuilding picks up in Las Vegas.

Their fortunes do seem to mirror each other. Builders closed almost 39,000 sales in Clark County in 2005, then just 3,900 in 2011 and 9,400 last year, according to Home Builders Research.

Vassallo – who occasionally writes pool-related stories for the Las Vegas Review-Journal – said he did a peak of nearly $8 million in annual business before the recession. That dropped to $1 million per year, but he’s on pace for more than $4 million this year.

Fueled by easy money, Las Vegas’ real estate market was roaring in the mid-2000s, and pool building was no different. Back then, homebuilders often sold pools with houses and rolled the extra cost into the mortgage, Vintage Pools’ Verbano said.

But when the bubble burst, lending, homebuilding and practically everything else in the economy, including pool construction, did a faceplant.

North Las Vegas, for instance, issued 851 permits for new swimming pools in 2006 but just 77 in 2012, city figures show.

Numerous pool builders went out of business, contractors say. Alexander said he temporarily closed two of his three stores, and Vassallo said he stayed in business in part by remodeling and repairing pools, including those in abandoned houses.

Vassallo said that when Las Vegas was grappling with heavier volumes of foreclosures and short sales, lenders sent out marketing materials to drum up business but included asterisks that said: “Except in Nevada.”

“You could get a loan for a pool anywhere in the country, except in Nevada,” he said, adding: “We’ve risen above that now.”

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter. Review-Journal staff writer Wade Tyler Millward contributed to this report.

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Real Estate Associate Program marks 20 years with reception at ICSC RECon 2018 Las Vegas

REAP alumni from across the nation celebrate REAP’s 20th anniversary.

Las Vegas, NV “Today marks a rite of passage – 20 years of existence, 20 years since our founding” said Real Estate Associate Program (REAP) board chair Lamont Blackstone, CRX, principal, G. L. Blackstone & Associates LLC, addressing over 150 REAP alumni, retail real estate industry executives and other supporters at the May 20th REAP reception at the International Council of Shopping Centers (ICSC) RECon 2018 Global Retail Real Estate Convention held May 20 – 23. The reception celebrated the 20th anniversary of one of the nation’s leading real estate diversity initiatives, whose over 1,000 graduates are helping to build the bridge between talented minority professionals and commercial real estate.

Angele Robinson-Gaylord (REAP Chicago ’09, president of US Property at IKEA Group, elected to Board of Trustees, ICSC) and REAP founder Michael Bush.

Since its initial program in 1998, REAP has implemented a multi-layered program of education, mentorship and strategic networking in nine key urban centers: New York City; Chicago; Washington, D.C.; Cleveland; Columbus; Los Angeles; Dallas; Kansas City; and Atlanta.

Blackstone outlined REAP’s goals to reach by 2020 including having a REAP alum or volunteer member join the board of directors of a major real estate company; facilitating connections between REAP’s nine markets; and becoming financially sustainable for the next 20 years and beyond. He said that his fourth goal was met this year when one of REAP’s most notable alumni, Angele Robinson-Gaylord, (REAP Chicago ’09), president of U.S. property at IKEA Group, was elected to the board of trustees of ICSC.

Blackstone paid tribute to REAP’s founder, Michael Bush, noting that REAP would not exist if not for his vision. Bush told the audience that “the industry needs our talent” and pointed out that over 500 REAP graduates hold management positions in leading real estate companies today. He congratulated REAP alumni on “your achievements, your perseverance and your courage.” He applauded and thanked REAP interim executive director Ken McIntyre and REAP associate program director Osayamen Bartholomew.

At RECon, REAP also hosted a panel discussion on Women in Commercial Real Estate, moderated by Starlett Quarles, managing director, The Bedford Group, LA. Speakers were REAP alumni: Robinson-Gaylord; London Kemp, director, studio real estate & facilities–worldwide operations, Netflix, LA; and Tamela Thornton, founding partner and principal, ESmith Advisors, a Dallas-based, CRE company, who was profiled by Bisnow as one of the women changing the face of CRE in Dallas.

The ICSC Partners in Diversity & Inclusion panel discussion featured ICSC president and CEO Tom McGee; NFL Hall of Famer Emmitt Smith, CCIM and chair, ESmith Advisors; Jocelyn Moore, sr. VP public policy & gov’t affairs, NFL (a REAP alum); John Gates, CEO, Americas Markets, JLL; Wendy Mann, CAE, CEO, CREW Network; Lyneir Richardson, CEO, Chicago TREND (also the keynoter at REAP’s recent NYC 2018 graduation). REAP was also represented at a Diversity Reception hosted by the ICSC Partners in Diversity & Inclusion and the ICSC Foundation where Kim Williams of Starbucks, VP of store development for South Central, Mid America and Western Mountain regions spoke.

For more information on Project REAP visit www.projectreap.org.

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Zillow expands new business of buying and selling homes to its second market: Las Vegas

Zillow CEO Spencer Rascoff. (GeekWire Photo / Kevin Lisota)

Zillow Group has expanded its new business of directly buying and selling homes to Las Vegas, its second market after kicking off in Phoenix in April.

Some homes on Zillow in Las Vegas will now have a big button that says “get an offer.” The seller fills out a short questionnaire and sends in a couple photos. About 48 hours later, Zillow comes back with an offer and an agent to work with. The seller and Zillow set up a call to walk through the offer and schedule an inspection. Then Zillow sends a revised offer after seeing the house. If both sides are happy with the situation, the seller signs forms digitally and picks a closing date. Zillow takes care of the rest.

Contractors working for Zillow do a small renovation project to prepare the home for sale. Zillow works with local agents — in Las Vegas Berkshire Hathaway HomeServices Nevada Properties and Coldwell Banker Premier Realty — to list and sell the homes.

The entrance into direct buying and selling represents an expansion of Zillow’s Instant Offers program. The move marks a risky bet, but one that CEO Spencer Rascoff says could be especially lucrative.

The company says it is going for sales volume over making a bundle on each and every sale. Rascoff explained the company’s pricing strategy in Zillow’s most recent earnings call, saying that right now, the main goal is just to come out ahead on homes at the beginning of the new program. Rascoff expects the margin on each home to rise as the home sales business grows.

For 2018, Zillow expects to hold 300 to 1,000 homes in inventory related to the new Homes financial reporting segment, from which it expects $125 million to $255 million in new revenue.

Zillow’s entrance into direct buying and selling of homes makes what was already a competitive market even more crowded. Another Seattle real estate heavyweight, Redfin, jumped into the market last year. Opendoor just today announced it has reeled in $325 million in fresh funding, a few weeks after Offerpad landed a $150 million debt and equity round.

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Aces lose lead late in 5-4 loss to Las Vegas

Reno, NV. – A hot start for the Reno Aces wasn’t enough to secure the victory on Saturday night. Anthony Vasquez got the start for Reno, tossing six innings of two-run baseball while striking out six. The Aces offense was led by Kristopher Negron and Christian Walker who both finished with two hits. Negron’s triple in the bottom of the 5th inning ties him for sixth all-time in Aces history with 13 triples. The 5-4 loss brings Reno to a record of 24-33 on the season, 10 games back of the first-place Fresno Grizzlies.

Anthony Recker got the Aces offense going in the bottom of the first inning. After Negron singled, Recker delivered his team-leading 26th RBI of the season on a sharp line-drive double. Las Vegas Former Aces outfielder Zach Borenstein responded in the top of the second with a two-run home run to give Las Vegas a one-run lead. In the bottom of the third, Ildemaro Vargas ran into a Corey Oswalt fastball for his fourth home run of the season. The Aces added their fourth and final run in the bottom of the fifth inning, but a three-run seventh for the 51’s was too much for the Aces to overcome.

Top Performers – Reno
• Kristopher Negron (2-for-5, 2 R)
• Ildemaro Vargas (1-for-5, R)
• Christian Walker (2-for-4, RBI)

Top Performers – Las Vegas
• Todd Frazier (2-for-3, R, 2 RBI)
• Zach Borenstein (1-for-3, 2-run HR)
• Dominic Smith (1-for-5)

Tomorrow’s Matchup
DAY DATE OPPONENT PROBABLE PITCHERS TIME (PT) (PT) RADIO/TV
Sunday June
3 Las Vegas 51’s RHP Joel Payamps vs.
RHP Drew Gagnon 1:05 p.m. KPLY 630 AM

Notes & Information
Sold It Out: There were 8,080 fans in attendance at Greater Nevada Field Saturday night. This crowd was the second sell out of the Aces 2018 campaign. Their last came on May 9th when 9,152 Aces fans poured into the stadium downtown. Tonight, marks the 34th sellout in Aces history.

Three Bags: With a triple in the bottom of the fifth inning, Kristopher Negron moved up to sixth place all-time with 13 triples for the Aces. Current 51, Zach Borenstein, is tied with Negron despite 106 more games. The veteran utility man has 54 career triples and tallied 11 in 2017 with Reno.

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16-acre spread on Las Vegas Strip listed for $800M

People walk on the Strip near Harmon Avenue past a 16-acre piece of property that is for sale Tuesday, May 22, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
People walk on the Strip near Harmon Avenue past a 16-acre piece of property that is for sale Tuesday, May 22, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
People walk on the Strip near Harmon Avenue past a 16-acre piece of property that is for sale Tuesday, May 22, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
People walk on the Strip near Harmon Avenue past a 16-acre piece of property that is for sale Tuesday, May 22, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
People walk on the Strip near Harmon Avenue past a 16-acre piece of property that is for sale Tuesday, May 22, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
People walk on the Strip near Harmon Avenue past a 16-acre piece of property that is for sale Tuesday, May 22, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
People walk on the Strip near Harmon Avenue past a 16-acre piece of property that is for sale Tuesday, May 22, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto

People walk on the Strip near Harmon Avenue past a 16-acre piece of property that is for sale Tuesday, May 22, 2018. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
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Three years after trying to sell a chunk of the Strip, a group of investors has put the property back on the market — and they’re asking $300 million more this time.

Spectrum Group Management and partners are trying to sell 16 acres — largely comprising retail buildings and parking lots — at the southeast corner of Las Vegas Boulevard and Harmon Avenue, across from CityCenter.

The asking price? A cool $800 million, according to listing broker John Knott of CBRE Group.

Real estate has been selling on Las Vegas Boulevard in recent years, though not at a rapid clip, and land sales have been especially slow, with no one paying close to the $50 million an acre that Spectrum wants.

But, the seller contends, this is the last developable site in the heart of the tourist-choked, casino-packed boulevard, and prospective buyers are looking at it.

“We’ve already had some meetings with people who don’t think we’re crazy,” Knott said.

When the property was listed in 2015, it was on the market for $500 million, Knott said, and the market has improved since then. That listing included the former Smith &Wollensky building, which Spectrum sold last year for $59.5 million.

CBRE on Tuesday announced that it was hired to sell the property. Knott, head of its global gaming group, said in a phone interview that the location is “fantastic,” being near MGM Grand, Planet Hollywood and other casino-hotels. He said he expects a buyer to bulldoze the existing buildings and develop something else.

The site includes a Walgreens; a low-slung retail plaza with souvenir shops, a food court and a Fatburger; the Hawaiian Marketplace, which has tenants but is laced with vacancies; a Travelodge; and the empty former Harley-Davidson Cafe building at Harmon.

Knott said the current owners would sell the property in pieces, and while a buyer is unlikely to build a megaresort with 4,000 rooms, the spread could have a smaller boutique or luxury hotel.

But will anyone pay $800 million? The long-mothballed Fontainebleau hotel on the north Strip sold last year for $600 million, and months later, Wynn Resorts reached a deal to acquire 38 acres of land next to Fashion Show mall for $336 million.

Years ago, a multibillion-dollar Elvis-themed resort reportedly was planned for the site. But in 2010, after the economy crashed, New York-based Spectrum acquired the property out of bankruptcy, managing partner Jeff Schaffer confirmed Tuesday.

He said the property generates “a lot of cash flow,” and that a buyer could leave some buildings in place but bulldoze others for a new project. He also said he wasn’t worried by the slow pace of land sales on the Strip, saying the property is in a “premier location” in the center of Las Vegas Boulevard.

Still, Schaffer acknowledged he was seeking a hefty price.

“I guess we’ll find out what people are willing to pay,” he said.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.

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