Siegel Acquires Apartment Complex From Bankruptcy
July 14, 2008
By Tony Illia
Siegel Group Nevada and Great American Capital recently acquired the 330-unit Deer Creek Apartments out of bankruptcy for $19.1 million, or $57,879 per unit. The 23-year-old property is on 6.68 acres at the northwest corner of Swenson Street and Flamingo Road, across from the University of Nevada, Las Vegas.
The Siegel Group had tried to purchase the property in late 2007 from the prior owner, Atherton Newport Investments, which had acquired it in February 2006 for $21 million, or $60,606 per unit. The Irvine, Calif.-based company had planned to demolish and build condominiums on the site for which it submitted entitlements. Early this year, however, the property was put into bankruptcy and the Siegel Group and Great American Capital continued negotiations until closing on the 144,144-square-foot apartment complex this month for $132.50 per square foot.
“We are going to be rebranding it into a Siegel Suites immediately,” said Michael Crandall, Siegel’s director of business affairs. “We plan to put $1.5 million into its renovation. We plan to finish by year’s end.”
The Deer Creek complex marks the company’s 16th Siegel Suites in Nevada, including 14 in the Las Vegas Valley, one in Mesquite and another in Reno. It brings Siegel’s total Nevada inventory to about 2,800 units. Siegel Suites are flexible-stay apartments targeted to new residents and blue-collar workers. SASCO Properties, a Siegel affiliate, will assume operational control of the Deer Creek apartment, which will be renamed Siegel Suites Swenson. Siegel, meanwhile, plans to build more rental units with a shops or a business hotel on excess land on the property’s southeast corner.
“We are bullish on the Las Vegas market,” Crandall said. “Our flexible-stay apartments cater to a large growing work force that needs housing.”
Southern Nevada’s apartment market had a 92.7 percent average occupancy rate in the first quarter, down 1.4 percent from a year ago, reports Applied Analysis, a Las Vegas-based business advisory firm. Median valleywide rents were $888 a month in the first quarter or $16 higher than in the first quarter of 2007.
“There are opportunities for developers and investors in lower- and midrange rental products given the current economic climate,” Applied Analysis principal Brian Gordon said. “Increased rental demand from job and residential growth will bode well for those holding well positioned assets over the long run.”
