RENO, Nev. — Despite a veritable mountain of rocks and huge boulders that's made grading difficult, site work is well underway at WestLook, the latest multifamily project for S3 Development.
WestLook will feature 192 garden-style units spread across nine three-story buildings plus a clubhouse. Residents will be able to park in front of their doors or in garages. The project will cost upwards of $40 million, says S3 chief executive officer Blake Smith.
Aspen Earthworks began mass grading in December, and bulldozers soon uncovered so many boulders that Aspen had to bring in a crusher to process the rocks.
“We had no idea we had this much rock out here,” Smith told the NNBW during an interview in mid-January. “But we are taking a negative and turning it into a positive — they will crush the rocks, and it will be used for base (material) in the foundations and as riprap on some of the tighter slopes (for erosion control).”
Vertical construction at WestLook should start this spring. S3 partnered on the project with Ensemble, an institutional real estate investment and development company with a national footprint. Katerra of Menlo Park, Calif., is the general contractor and is expected to deliver the first units in the first quarter of 2021.
The WestLook project encompasses nearly 8.5 acres on two parcels. Three years ago, S3 Development acquired roughly five acres that housed five dilapidated motels, most notably the Wildflower and Silver Star, and it also acquired an additional three acres on the north side of the old Wildflower parcel.
The project will be developed in two terraces, with the lower terrace featuring unobstructed views of the Sierra. The upper terrace features views of the downtown skyline. The parcel also boasts easy access to Interstate 80, the Truckee River and McCarran Boulevard.
“This is really unique,” Smith says. “By taking the blighted motels out, we took out 85 units and will build 192 units. Repositioning this (parcel) will change this whole quadrant. This corridor (West Fourth Street) will shine, and that's what the city is looking for.
“When we acquired it people were wondering what we were doing, but once we get the land cleared up, people will be able to see the vision.”
Reducing a mountain of rocks to rubble isn't the only challenge S3 had to overcome. It had to build a $1 million pump station to provide adequate water pressure to the site, as well as extend the main sewer line several thousand feet.
Additionally, high building costs led to many round-table planning sessions to figure out ways to shave dollars without sacrificing quality.
One way S3 was able to lower costs and still maintain upscale finishes and amenities for the apartment community was by using value-engineered prefabrication framing rather than on-site framing.
Much of the framing and electrical work will be completed in a factory in Modesto, and the pre-inspected wall panels will be assembled on-site in Reno.
“Instead of needing 40 (carpenters) here, you probably will only see eight, and we are seeing some economies of scale from that,” Smith notes.
The construction method actually leads to a stronger product, he adds, since walls have to be built sturdier to survive the rigors of transportation over the Sierra.
S3 Development has several other projects expected to begin in 2020. It recently completed 280 apartment units at Lyfe at the Marina, a $55 million project that's already 85 percent leased.
Later this year, S3 and Ensemble will begin the large redevelopment project at Keystone Avenue and Fifth Street, which includes 302 apartment units, a four-story parking garage and new retail space.
Work is expected to begin this fall. Lastly, the company is expected to begin site work this spring at 5 Ridges, its new 380-acre master-planned residential community atop the ridgelines just north of Highland Ranch Parkway in Spanish Springs.
Development of WestLook comes amid a spate of continued activity in the multifamily sector. However, despite construction of just under 4,700 new apartment doors already underway in Greater Reno-Sparks, overall vacancy is expected to remain low across the region.
Additionally, according to the latest apartment market report by real estate appraisal firm Johnson Perkins Griffin, there are several other large apartment projects planned for the northwest Reno submarket that could bring more than 750 new doors to that submarket.
In addition to S3 Development's project at Fifth and Keystone, there are multifamily projects in the works for upper Keystone Avenue (125 units), West Fourth Street (192) and South Verdi Road at Cabela Drive (242).
Average rents for the desirable northwest submarket were $1,382 in the third quarter of 2019, a $19 decline from the previous quarter. Vacancy in the northwest, meanwhile, dipped slightly to 2.7 percent.
Overall, Johnson Perkins Griffin notes, average rents across Reno-Sparks stood at $1,345 and vacancy was at 3.31 percent. By way of comparison, just four years earlier the average rental rate in Reno-Sparks was $946. That's a 42 percent spike in 48 months.