Ex-Condo Tower Site Trades for $19M
July 7, 2008
By Brian K. Miller
LAS VEGAS – The Siegel Group Nevada Inc. and Great American Capital has acquired the 330-unit Deer Creek Apartments here for $19.1 million. The duo acquired the 6.68-acre property out of bankruptcy court with plans to renovate the existing buildings and develop the excess land.
The Siegel Group was negotiating the purchase of Deer Creek back in late 2007 with the prior owner of the property, an entity of Atherton Newport Investments, which acquired the property in February of 2006 with the intention of razing the site in favor of a condominium development. The sale to Siegel didn’t go through before the entity filed for bankruptcy in early 2008. Siegel and great American continued to negotiate with the bankruptcy trustee.
Deer Creek Apartments sits two miles east of the Las Vegas Strip, on 6.68 acres at Flamingo Road and Swenson Street. The multi-building complex borders the University of Nevada and the $100-million first phase of the Vegas Grand condominium development, the second phase of which is in the process of being sold. The Hard Rock Hotel is also a short ways from the property.
SASCO Properties, an affiliate of the Siegel Group, will assume operational control of Deer Creek Apartments and “immediately begin to correct the numerous deficiencies that the previous owner and property management company failed to address, which resulted in high vacancy rates and numerous tenant delinquencies that are months in arrears,” Siegel Group Nevada tells GlobeSt.com.
The property will be re-tenanted and then renovated “to correct years of deferred maintenance and cosmetic issues.” It will then be renamed Siegel Suites Swenson and operate under the Siegel Suites brand of “flexible-stay” properties where people can rent units without long-term commitments. Siegel has built the chain up to include more than 2,500 units in the Las Vegas Valley.
In addition, Siegel Group says it and great American plan to develop the excess land. The duo is currently deciding between additional apartment units over a retail component or a flagged business hotel.
The Vegas Grand project is a 212-unit residential building that is nearing completion. The remaining unsold units in the building, approximately 16, are on the market for sale along with the land and entitlements for the 16-acre, 782-unit second phase. CB Richard Ellis has the listing. Offers were due last month. There was no overall asking price; approximately $107 million was spent on the first phase, which included infrastructure for the second phase. The seller is Lehman Bros., which gained control of the project in October at auction for $55 million after developer Del American defaulted on its development loan, according to county property records.