A luxury Las Vegas apartment complex that is heavy on amenities and even charges tenants a “resort fee” has sold for top dollar.
Griffin Capital Co., a Los Angeles-area investment firm, acquired South Beach — a 220-unit complex on Russell Road just east of the 215 Beltway — for $62 million, property records show.
The sale, by South Beach developers Bob Schulman and the Watt Cos., closed Nov. 27.
The deal amounts to more than $281,800 per unit, more than double the market average as tracked by Colliers International. The price-per-door might also be a record for local garden-style apartments, said listing broker Taylor Sims of Cushman & Wakefield.
Eric Kaplan, a managing director with El Segundo, California-based Griffin, said this was the company’s first apartment purchase in Las Vegas.
“We had no interest in buying a commodity property. … We wanted something unique that drives demand,” Kaplan said.
Las Vegas’ apartment market has heated up in recent years with increased construction, shrunken vacancies, fast-rising rents and lucrative investor purchases. Rental rates are stretching affordability for some tenants, but the South Beach deal is another sign that investors are still betting big on apartments here.
Like most rental complexes that were built in Southern Nevada the past three or four years, South Beach is in the suburbs. But it seems to have more amenities than its rivals, offering a basketball court, sand volleyball, soccer field, Zen garden, Pilates studio, indoor and outdoor gyms, yoga and meditation classes, steam and sauna rooms, poolside cabanas with a mini-fridge and television, and Sunday brunch.
The southwest valley complex, at 8920 W. Russell Road, also charges a monthly “resort fee” to pay for the goodies: At the time Griffin closed the sale, the fee was $80 per adult tenant, according to Sims.
Kaplan said that South Beach sits in a fast-growing section of the valley and has high-quality construction. But, when asked why his group was interested in the property, he first cited its “superior amenity package.”
“There’s nothing like it in the market,” he said.
Schulman, founder of Schulman Properties, said that renters started moving to South Beach in spring 2017 and that the complex was 90 percent occupied at the time of sale. The tenants were mostly singles and couples, with a large share being young adults, and “the vast majority of people made a lot of money,” he said.
According to Schulman, renters’ average income there was around $80,000 or $90,000, and several tenants worked for themselves, in casinos or in the medical field.
He also said his group initially did not plan to sell the complex, but eventually it “made sense” to shop it around, and the developers listed it with Cushman & Wakefield.
Watt executives could not be reached for comment.
It costs a lot to live with a lot of perks. New tenants at South Beach were paying an average of $1,756 per month at the time of sale, Sims said. By comparison, the average effective rent for a Las Vegas-area apartment last quarter was $1,017, according to Reis Inc.