The purchaser of the Meadow Wood Apartment Community in south Reno might want to convert the third-largest apartment complex in the region into condominiums.
But it wouldn't be easy and it wouldn't be soon, said a broker who represented the buyer, Nikmat Properties of Sherman Oaks, Calif.
The 704-unit complex on both sides of Neil Road near Delucchi Lane sold for $49.5 million.Nikmat Properties purchased it from Warren Lortie Associates Inc.
of Newport, Beach, Calif.
Len Ramos of the CB Richard Ellis office in Reno, who represented Nikmat Properties, said the purchase price of about $70,000 per unit reflects the buyer's belief that the apartment market is about to firm up.
Condo conversions are taking some units off the market, Ramos said, at the same time that construction of new apartment units has lagged behind demand.
The combination of those trends, Ramos said, is likely to bring higher occupancy rates, higher rents and fewer concessions such as free move-in.
At the same time, Ramos says Nikmat is studying the potential to convert the Meadow Wood apartments into condominiums, although that's not likely to happen soon.
"It's not an easy property for a conversion," he said.
A big hurdle would be winning city approval and undertaking the process of re-mapping the complex so that individual units could be sold.
"Additionally, there s no history of apartment communities of any size which have successfully gone through the condo conversion process and sold for a profit,"Ramos said.
The ability to generate additional value, either through higher occupancy and rent increases or through a condo conversion, was one of the requirements that Nikmat placed on its search for apartment properties in the Reno-Sparks area.
The company also liked the location of Meadow Wood apartments, close to jobs, shopping and bus routes.
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