George Smith Partners Secures $51M in Construction Financing for M-F Project in Las Vegas
- Feb 19, 2014
George Smith Partners has secured $51 million in construction financing for the development of Elysian at the District, a 360-unit Class-A multi-family community in Las Vegas, on behalf of a joint venture between The Calida Group and Cypress Equity Investments.
“Elysian at The District is the first truly lifestyle oriented luxury apartment project in southern Nevada,” David Rifkind, George Smith Partners’ principal & managing director, told Commercial Property Executive. “It is part of Green Valley Ranch allowing tenants to take full advantage of one of the most dynamic retail, dining and entertainment districts in Las Vegas. The location on the 215 Beltway allows easy access to anywhere in the Las Vegas valley.”
When George Smith Partners took on the assignment nearly nine months ago, the Las Vegas multi-family market was only beginning to recover from the downturn.
“We thought that the site spoke for itself but that the multi-family story in Las Vegas was beginning to improve,” Rifkind said. “Occupancies indeed firmed in 2013 and rental growth has resumed.”
Las Vegas once had the highest turnover in the U.S.—almost 90 percent per year. That foreclosure dynamic has created many new, long-term renters and the turnover rate has decreased dramatically and the market has become stable.
“The luxury apartment market in Las Vegas is continuing to recover at a good pace. As long as the market does not overbuild, it will remain a very attractive value proposition for investors and lenders,” Rifkind added. “At the moment, the majority of new and proposed multi-family is controlled by a relatively small group of developers who are aware of the supply/demand dynamics and will be disciplined.”
Rifkind admitted he will be concerned if more players emerge in the near future, but for now, well located, sensitively designed apartments are quite attractive in Las Vegas.
“Elysian raises the bar on quality, location and concept very high for the new cycle,” he concluded. “This is a good sign.”
The $51 million construction financing was the combination of a mezzanine loan and a senior loan, obtained by negotiating an inter-creditor agreement with two separate providers. According to Rifkind, George Smith Partners worked with numerous senior construction lenders within its network of financiers to ultimately secure the most competitive financing for its client.