Las Vegas Project Overview with Mark Khuri

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Alternative Investors Mastermind Postcast

Hosted by Jack Krupey

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Alternative Investors
Mastermind Postcast

Hosted by Jack Krupey

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The Avenue Apartments

Las Vegas, NV

The JKAM Diversified Real Estate Fund is participating in a deal in Las Vegas with the same Operating Partners who are greatly exceeding expectations. Our Phoenix, AZ asset with this Partner is performing 22% over our initial projections.

This Operating Partner has taken 16 communities full cycle with an average hold time of less than 2 years and a project-level IRR of 45.50%.

Our Fund has already made a substantial commitment to this project, and we have negotiated a sweetheart deal with the Operating Partner. Over the next week, the Fund can secure an estimated 3-5% increase on returns from this project through commitment of an additional $500k+.

Project Summary

Las Vegas Market Brief:

  • Las Vegas metro apartment market ranked 3rd in the nation for annual rent growth.
  • 8 straight years of positive rent growth and has increased rents 57% since the bottom of the recession in 2012.
  • Households earning $100k+ annually growing by 25.2% 2025.

Project-Level Returns:

  • 252 Units
  • 16-17% IRR over 3 years
  • 1.55x Equity Multiple
  • Upside Potential: 45.8%+

Asset Details:

  • Currently 94% occupied.
  • On Tropicana Ave, 15 minutes from the Las Vegas Strip, McCarran International airport and less than 5 miles from UNLV.
  • Targeted to provide both in-place income and growth over a shorter 3-year investment term.

Business Plan Brief:

  • Current rents are below market by about 18% for the post-renovation product.
  • Grow rents from $1,089 to $1,290 average.
  • $4.4m in renovations and upgrades.
  • Increase the net operating income from $2.2m today to $3.3m in year 3.
  • Upside scenario: assuming cap rates remain consistent with today’s market and revenue growth exceeds expectations by 2%, the deal level return results in a 45.8% IRR.

As mentioned, we have already made a substantial commitment to this project, and we have negotiated a sweetheart deal with the Operating Partner. Over the next week, the Fund can secure an estimated 3-5% increase on returns from this project through commitment of an additional $500k+.