Irvine-based apartment investor Bascom Group LLC has made the largest acquisition in its 20-year history, landing a nearly 5,000-unit portfolio of rental properties in and around Las Vegas.
The privately held real estate company partnered with Oaktree Capital Management LP in Los Angeles to buy a 15-property portfolio of apartment complexes in Las Vegas from Houston-based Camden Property Trust.
The deal, which came last week, also includes a small retail center and about 20 acres where another apartment complex is planned.
The 4,918-unit portfolio traded hands for $630 million, according to Camden.
That works out to about $128,000 per apartment, not factoring in the other assets.
The transaction has been described in local news reports as the priciest apartment sale in Las Vegas history.
The acquisition also is the largest that Bascom has been involved in, according to real estate sources familiar with the transaction.
The company now owns about 21,800 apartments nationwide, including more than 8,200 in Las Vegas.
Bascom is now believed to be the largest owner of rental properties in Las Vegas, following a three-year push into the market.
It began buying properties in Las Vegas in the latter half of 2013, building up a portfolio of more than 3,300 units prior to the deal with Camden.
The company and its financial partners have spent close to $1 billion acquiring properties in the market.
Many of the company’s purchases in the city have been made through ventures with Oaktree, a global investment manager that oversees some $97 billion in assets.
Oaktree has a sizeable portfolio of office and other property types in Las Vegas. It also is an active investor in Orange County’s real estate market; it has partnered with Hines Interests LP on the bulk of the Houston-based company’s office purchases in OC the past six years (see Caltrans story, page 1).
Recent Growth
Bascom has been encouraged by the growth and diversification of the entertainment industry in Las Vegas over the past few years, as well as the city’s continued strength as a tourist destination and a growing influx of older residents, company executives said after announcing other deals in the city over the past year. Bascom declined to comment on the just-completed deal with Camden.
There’s also a lack of rental product being built in the area; less than 3,000 apartments are expected to open this year, while 30,000 new jobs are forecast, Camden executives said in January.
Bascom’s just-acquired Las Vegas complexes are more than 95% leased, and average monthly rents were $1,060 last year, Camden’s executives said last week.
Camden executives said its Las Vegas portfolio saw 6.7% revenue growth last year, on the lower end of its 55,254-unit national portfolio.
That’s still a notable improvement over 2012 and 2013, when rental growth in Las Vegas was less than 2% annually, company officials said in January.
The 15 complexes sold to Bascom were built between 1989 and 1997, according to regulatory filings.
Those properties are said to be among the higher-end complexes built during that period, with numerous amenities, like clubhouses, pools and tennis courts.
LA Project
Camden said last week that it could sell an additional $600 million of its properties this year, but did not mention in which markets those deals would take place. It owns five rental complexes with 1,943 units in OC.
The real estate investment trust said in January that it intended to sell apartments to pay down debt and fund development while also protecting itself from a potential downturn in the economy in the next couple of years.
Its largest complex under development in Southern California is a 287-unit residential project on Vine Street in Hollywood that will include a 40,000-square-foot Equinox Fitness.
That project’s cost is estimated at about $145 million, according to the company’s latest earnings report.
Bascom’s typical hold period for new investments runs between three and five years.
The company expects the Las Vegas assets to fall within that range, although it is prepared to keep the properties longer if necessary, sources tell the Business Journal.
The company plans to sell the 20-acre developable site that was included in the portfolio deal, the sources said.
