In the first major multi-family sale of the year in northern Nevada, Kromer Investments of Reno bought the 110-unit Meadows Apartment complex from the McDonald family of Idaho Falls, Idaho.
The complex at 111 E. Prater Way sold for $6.8 million, said Alex Mellinger, a senior associate in the multi-family group of CB Richard Ellis in Reno. The company represented the sellers.
The price, Mellinger said, represented a cap rate first-year operating income as a percentage of the sales price of 6.4 percent.
He said the property has strong upside potential as its vacancy rates have run at 15 percent or higher, and Kromer Investments, one of the largest owners of apartment units in the area, appears to have some room to raise rents.
The transaction comes as tighter lending standards are slowing some apartment deals, said Len Ramos, first vice president in the CB Richard Ellis multi-family group.
Speaking to the commercial realty group CCIM last week, Ramos said lenders and buyers are looking for price concessions when they shop for anything except for top-drawer properties.
But he said vacancy rates in Reno and Sparks are likely to fall this year as families who might have bought homes in earlier years instead stay put in apartments and some recent homebuyers return to rentals if they can't afford their mortgage.
While some 1,000 apartment units are approved for construction in the area, Ramos projects that about 200 units will be built this year. Adding to the inventory, however, are vacant homes that are available for rent and condominium units that are put onto the rental market.
