By Steve Nosrat, Principal, Avison Young
As we prepare to close out 2021, Las Vegas continues to thrive, maintaining its place as one of the fastest-growing multifamily markets in the nation. Clark County’s population grew by 2 percent — nearly 40,000 — ranking it among the top 10 metros with at least 750,000 residents. This has further increased the already high demand for multifamily properties.
Annual job growth in Las Vegas has outperformed the national average for five straight months, with leisure and hospitality jobs driving most of the recovery. Housing demand and rents are hitting all-time highs all over the Valley. Home values have risen 23 percent annually, and apartment rents are up 22 percent. Vacancy rates are down to just 3.8 percent, compared to the national index of 4.5 percent.
Steve Nosrat, Principal, Avison Young
This has spurred investors on, causing them to feel more secure with Las Vegas’ long-term outlook. Apartment sales passed $1 billion in the second quarter of 2021, which has only happened twice before in Las Vegas history. The 12-month sales volume has passed $3.1 billion and is trending positively for 2022, according to CoStar.
The apartment market gained significant momentum during the third quarter. Cap rates have compressed, and recent sales shows some properties changing hands with cap rates below 4 percent. The current favorable financing environment is also a major factor, allowing investors to take advantage of long-term, interest-only financing options or extremely low short-term floating rates.
Additionally, new construction continues to flourish. This includes newly completed or soon-to-be-completed properties that are adding hundreds of new units to the growing market:
• Elysian at Centennial Hills
Cost: $40.1 million, 306 units
Completion: January 2022
• Aspire at Tesora
Cost: $18.1 million, 92 units
Completion: October 2021
• Elysian at Tivoli
Cost: $65.52 million, 359 units
Completion: October 2021
• Alta Southern Highlands
Cost: $29.3 million, 228 units
Completion: October 2021
With all this activity, 2021 has proven to be a powerful year for the Las Vegas multifamily market.