Argosy Invests in Spring Mountain
On December 17, 2015, Argosy Real Estate Partners III, L.P. and its parallel funds made a controlling investment in the development of 3616 West Spring Mountain Road, a 295-unit Class-A multifamily project with approximately 9,000 square feet of ground-floor retail, located in the Chinatown district of central Las Vegas, Nevada. The project will offer the only Class-A apartment units in a low-rise community within a mile of the Las Vegas Strip, presenting an opportunity to develop in an underserved niche of the Las Vegas multifamily 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 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. Spring Mountain offers an opportunity to invest in a new development project in a market at an earlier stage of the multifamily development cycle than other markets which have recovered more quickly. Rapidly recovering land values in central Las Vegas are expected to limit the pipeline of competitive supply in the submarket, and create a significant cost basis advantage over any future multifamily development in proximity to the Las Vegas Strip.
The business plan is to construct, lease-up, and stabilize the project prior to disposition. Preliminary site work is expected to begin in February 2016, and vertical construction is planned to start in May 2016. Debt financing for the project is being provided by U.S. Bank.
AREP III partnered with Fore Property Company, a leading developer, builder, and manager of multifamily properties in Las Vegas. 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. Affiliates of Fore Property Company will act as general contractor and property manager for the project.