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