Argosy Real Estate Partners Invests in Las Vegas Multifamily Development Site
On September 20, 2018, Argosy Real Estate Partners IV, L.P. and its parallel funds (“AREP IV”), in partnership with Fore Property Company (“Fore”), acquired the development site for 3200 West Twain Avenue, a 287-unit Class-A multifamily project (“Twain’ or the “Project”) with approximately 1,400 square feet of ground-floor retail, located in central Las Vegas, Nevada.
Preliminary site work is expected to begin in October 2018, and vertical construction is planned to start in December 2018. The Project, upon completion, will offer Class-A apartment units in a mid-rise community within one mile of the Las Vegas Strip, presenting the opportunity to develop a premium, highly-amenitized multifamily property in an underserved niche of the Las Vegas apartment market. The Project’s location will take advantage of the growing preference for urban multifamily product, appealing to renters in search of Class-A product in a true urban infill location, which has been largely unavailable to date in the Las Vegas market. The Project also presents the opportunity for a repeat investment alongside Fore, one of the few institutional-quality multifamily developers headquartered in Las Vegas. Fore has extensive market knowledge and development experience in southern Nevada.
The Twain development site, purchased on an off-market basis from a corporate seller, is located on the west side of Interstate 15 and adjacent to the Las Vegas Strip. The development site benefits from its proximity to the Strip, the center of Las Vegas’ tourism-driven economy, providing a short commute for workers in the leisure and hospitality industry. The site is also well-connected to the rest of the Las Vegas metro area.
Despite a recent uptick in new apartment construction, the Las Vegas supply pipeline continues to lag behind the nationwide apartment market, and new development has largely been concentrated in suburban areas. Very little new product has been delivered in the Project’s immediate submarket, due in large part to the lack of suitable sites for centrally located development parcels.
The Las Vegas market has favorable characteristics for multifamily development including one of the nation’s lowest homeownership rates and a young, mobile workforce that has traditionally preferred renting instead of buying. Twain offers the opportunity to invest in a new development project in a market positioned at an earlier stage of the multifamily development cycle than many other markets. Rapidly recovering land values in central Las Vegas are expected to limit the pipeline of competitive multifamily supply in the submarket, and create a significant cost basis advantage for the Project over any future multifamily development in proximity to the Las Vegas Strip.
This is Argosy’s second investment with Fore. Fore maintains its headquarters in Las Vegas and has significant development and construction experience in the Las Vegas metro area and in other markets, having developed over 22,000 units across the U.S. since its founding in 1978.