A 324-unit apartment complex in northwest Reno has been sold for $27 million in a transaction that observers say demonstrates the confidence of investors in good-quality residential rentals in Reno.
MG Properties Group, a privately held company headquartered in San Diego, purchased the Manzanita Gate Apartments at 2475 Robb Drive.
The property, which had been bank-owned for more than a year, was acquired from Midland Loan Services of Overland, Kan. The seller was represented by the Jones-Saglimbeni Group and Kenneth Blomsterberg of Marcus & Millichap. MG Properties Group represented itself.
The acquisition was financed with a $21.6 million fixed-rate loan from Fannie Mae arranged by Key Bank Real Estate Capital.
Mark Gleiberman, president of MG Properties Group, said his company thinks it can add value to Manzanita Gate through operational improvements.
"After more than a year of REO operations, the community was not keeping up with collections growth evidenced at other properties in the Northwest Reno submarket," Gleiberman said.
Manzanita Gate, completed in 1997, includes one- and two-bedroom apartments that average 940 square feet. Each unit has a washer and dryer.
Gleiberman said MG Properties plans minor interior upgrades, plans to update common area and plans to fix maintenance items that have been delayed, including roof and window issues.
He said the company also expects to benefit from overall improvement of the apartment market in the Reno-Sparks area.
Lane Jorgensen, MG Properties' investments manager, said the company was drawn by Manzanita Gate's strong location close to good schools, a public library and several parks.
"We are wary of high-turnover commodity apartments in secondary markets where residents have a history of concession shopping," said Jorgensen. "Manzanita Gate immediately stood out to us as a destination property in Reno."
The property is 93 percent occupied, said Blomsterberg.
He said major investors who have been buying apartment investments in top-tier markets now are widening their sights to include secondary and smaller market such as Reno.
Brian Egan of Egan Commercial Real Estate said in an analysis prepared for members of CCIM, a commercial real estate group, that the Manzanita Gate transaction shows that investors increasingly have confidence that the apartments market in Reno is stable.
