Rental rates are rising across the Las Vegas Valley.
The southwest portion has seen the biggest increase of nearly $100 followed by the southeast at $86, according to a report by Las Vegas-based Applied Analysis.
“Rent growth has been relatively robust in the past two years as new product has entered the market and underlying fundamentals have improved,” said Applied Analysis Principal Brian Gordon. “During the past 12 months, average rents have increased by an impressive 8 percent and while we don’t necessarily expect that pace of growth to continue, it would appear that rents will continue within the mid-single-digit range through the end of the year.”
Class A rental units have hit the $1,000 mark as rents during the first quarter of 2015 were $982 in Las Vegas compared to $1,113 so far this year.
Debra Peterson, general sales manager at For Rent Media Solutions of Las Vegas, said the average rent in Southern Nevada is $860, an increase of nearly 2 percent over last month.
Southeast of Las Vegas, rent is higher as Peterson said Phoenix’s average rental rate is $903 and more than 400 miles northeast, Salt Lake City is at $952 a month.
“New construction may slow both occupancy and rent growth,” she said, “not to mention the new-home construction, which could increase the single-family home rental shadow market.”
The Nevada Housing Division’s annual report on multi-family housing affordability, “Taking Stock: Nevada’s 2015 Affordable Apartment Survey,” revealed that rents have increased about 11 percent since 2013.
The division’s Low Income Housing Tax Credit program hands out federal housing tax credits each year to developers to build affordable apartment communities for seniors, veterans and families. Nearly 24,400 of these units exist statewide.
As rental rates are rising, Las Vegas-based West Corp. is in the midst of the final leasing stages at two of its properties, SW on Durango Drive, and Union on Hualapai Way, and has another two under construction; 215, at the 215 Beltway and Buffalo Drive, and Evolve on St. Rose Parkway and Spencer Street.
In addition, two more are on the verge of beginning construction. Spur, which will be located at the 215 Beltway and Gibson Road in Henderson, and Empire in west Henderson.
McCann said Empire is the newest plan for West Corp. as it boasts three and four-story lofts.
“We’re pushing the luxury level of apartments because we’re catering to a group of individuals, whether younger or older, they’re expecting a little more from their living,” she said. “We’re trying to give them what they expect, which is more than what you get for buying.”
While the millennial group makes up the majority of West Corp. tenants, McCann said those 55 and older are also making an appearance.
“We have both the younger and older demographic,” she said. “Those 55 and older want to downsize but still have luxury and don’t want the upkeep of a home.”
McCann said the type of tenant West Corp. attracts has changed in recent years.
“In the past two or three years it’s changed and I think it changed before the recession, too,” she said. “We’re more stable at this point, which is good, but we’re definitely seeing a younger crowd.”
Erica Arthur, vice president of Nevada State Apartment Association and vice president of Ovation Property Management, has five projects in various stages of development all over the Las Vegas Valley.
“We’re not even close to maxing out and as single-family housing prices move upward, providing quality housing at an affordable price is something we think is valuable,” she said.
In the future, Arthur said she doesn’t anticipate the valley will see rental increases much longer.
“The rest of 2016 will be strong and I’m hopeful for 2017 but I think we’ll see it flatten out because there will be a tremendous amount of new product coming out,” she said. “It depends on national economy and while we were one of the first ones in and last ones out in the last recession, I hope we don’t repeat that.”
Approximately 5,000 rental units are in the development pipeline in varying stages of activity and expected to come on the market this year, Gordon said.
“Some new projects are wrapping up development in the southwest submarket, while a number of planned projects have yet to break ground,” he said. “Generally speaking, many of the newer projects are targeting the higher-end of the market, given the recent run-ups in land costs.”
Standing out in the crowd will become more important as more and more rental units make their Las Vegas debut.
McCann said adding amenities will be the key.
“Adding amenities is a total game changer in who you’re catering to and what’s wanted from the aspect of the resident,” she said. “Before, clubhouses hardly ever got used and only had a pool table. Now we’ve added 20 new amenities to every property including our older ones.”
She added that the company aims to make its resident’s lives easier and more convenient.
“Everyone’s going to look for new amenities and services to provide in order to make things easier for people to live so they don’t have to drive or walk too far,” she said. “Everyone’s on the same path and don’t see that changing much anytime soon.”
Contact reporter Ann Friedman at email@example.com or 702-380-4588. Follow her on Twitter: @AnnFriedmanRJ.