Reno Reporter

There aren't enough investment properties in northern Nevada, in particular the Reno-Sparks area, to keep up with the booming buyers market for multifamily housing buildings. 

Investors are willing to pay a premium price to get into the multifamily housing market in the Reno-Sparks area. 

"Many are looking for value-add properties, B and C class properties where they can create value through operations, renovation, financing and lease recapture," Ken Blomsterberg, Marcus & Millichap's senior marketing director, told the Northwest Nevada Business Weekly. "Normally they would be looking for (large) stabilized newer properties. Now they are looking for deals in that 50- to 100-unit range. Investors are broadening their scope, and Reno is definitely a market where they are zeroed in."

Properties for multifamily units are hard to come by in Reno-Sparks and because of that landowners, who are trying to avoid paying capital gains taxes, don't want to sell their community investment properties unless they have something to reinvest their money into. 

"It's tough for sellers — what do they do with the proceeds they are going to make? Where do they take it? They want to stay in Reno, but it's already extremely difficult to find an (investment) property," Ryan Rife, Marcus & Millichap's first vice president of investments, told the Northwest Nevada Business Weekly. "It's going to be virtually impossible for them to sell and get back into this market."

A tough decision to make, especially with rent prices on the rise because apartments are hard to come by.

“The influx of population growth and job creation, especially in higher-paying jobs, pulls the entire market up,” Rife said to Northwest Nevada Business Daily. 

It's a sharp turn from what the area expected prior to the COVID-19 pandemic, when experts believed there wouldn't be enough people to fill the units.

Average overall rent real estate in the Reno-Sparks area was a record-high $1,607 in the second quarter of 2021, according to appraisal firm Johnson Perkins Griffin.

That was a 9.4% increase from the first quarter average of $1,469 and a 17.4% year-over-year increase from the second quarter of 2020, when average rental rates were $1,369.