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%.
Tides on Dunlap
This is a short walkthrough video of the Phoenix asset that is exceeding initial projections.
The Avenue Apartments
Las Vegas, NV
We are pleased to present the details of our latest off-market apartment project in Las Vegas, NV. The Avenue, a 252-unit apartment community, is 94% occupied and is targeted to provide both in-place income and growth over a shorter 3-year investment term.
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+.
Highlights & Investment Summary
Positive Market Trends, Las Vegas Stats:
- Las Vegas rents grew 5.5% in 2020 despite the effect the COVID-19 pandemic had on the economy.
- The Las Vegas metro apartment market ranked 3rd in the nation for annual rent growth.
- The Las Vegas market has now experienced 8 straight years of positive rent growth and has increased rents 57% since the bottom of the recession in 2012.
- Population is projected to grow to 2.3 million by 2025, up 2% from 2020.
- Las Vegas is projected to experience one of the largest employment gains through 2025, with employment levels returning to pre-pandemic levels by Q3 2021.
Highly Attractive Property & Location:
- The Avenue sits on over 12 acres, consists of 252 units and is 94% occupied.
- The property is very well located on Tropicana Ave, 15 minutes from the Las Vegas Strip, McCarran International airport and less than 5 miles from the 350 acre campus of the University of Las Vegas (UNLV) which enrolls about 30,000 students.
- The property features numerous amenities including a leasing office/clubhouse, fitness center, swimming pool and spa, business center, bark park, BBQ areas, and a racquetball court.
- Built in 1995, the community’s unit mix consists of 1bed/1bath and 2bed/2bath floor plans with attractive 9-foot vaulted ceilings.
Experienced Operating Partners:
- This will be the Fund’s second partnership with this specific Operating Partner. Our latest project with them in Phoenix last year is over-performing 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%.
- Their current portfolio consists of 28+ apartment communities and 8,000+ units with $1,300,000,000 in value.
Proven Value-Add Plan:
- Current rents are below market by about 18% for the post-renovation product.
- The business plan is to grow rents from $1,089 to $1,290 on average by injecting $4.4m in renovations and upgrades and increase the net operating income from $2.2m today to $3.3m in year 3.
- Planned renovations will follow our Operating Partner’s brand design, which includes new quartz countertops, stainless steel appliances, upgraded shaker-style cabinets with pulls, brushed nickel hardware, upgraded plumbing & lighting fixtures, a contemporary paint scheme, wood- like flooring and replacing any outdated washers/dryers.
- Once fully renovated, The Avenue will attract young professionals and millennials who are drawn to freshly renovated, amenity-driven communities in excellent locations.
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+.