Yardi Matrix: Better Odds in Las Vegas
Employment Growth Triggers Demand
Though still in recovery mode, Las Vegas’ multifamily market is benefiting from an expanding economy and rising demographics. Employment gains are widespread, with activity led by the
mining, logging and construction; professional and business services; and leisure and hospitality sectors. More than $10 billion worth of gaming and hospitality projects are under development, including the Lucky Dragon Hotel and Casino, slated for completion in early December, and Genting’s $4 billion Resorts World Las Vegas.
Employment opportunities mixed with the low cost of living have bolstered population growth, which in turn has increased occupancy rates and put pressure on rents. With occupancy of stabilized properties up to 95.1 percent as of September, average rents rose in the third quarter to $881.
Construction is picking up steam: More than 1,800 units are slated for completion by the end of the year and another 5,300 are currently under construction. However, with development substantially targeted toward the higher-end renters and many of the new deliveries focused on the Lifestyle segment, the metro is facing a growing affordability problem. Meanwhile, improving property fundamentals and relatively high yields are intensifying demand for multifamily assets, and transaction volume climbed 50% year-over-year through November.