Apartment construction sprouting around region
Work is fun once again for J Witt, president of Silver Wing Development.
Silver Wing Development has two apartment projects in the works that will add 674 new doors to the multi-family housing supply in Reno. Silver Wing already is going vertical on The Bungalows at Sky Vista, a 338-unit project on Silver Sky Parkway in the North Valleys. Later this summer, Silver Wing Development will begin demolition of an older apartment complex on the eastern shore of Virginia Lake to make room for Edgewater at Virginia Lake, a mix of 48 for-sale townhomes and 288 condo/apartment units. Each project is projected to cost around $40 million.
After more than five years of few apartment projects, developers are shifting into construction mode as sales for multi-family properties remain brisk. Ryder Homes kicked off the construction trend last year with the Village at Arrow Creek Parkway, a 208-unit project being built by Tanamera Construction.
Tanamera is general contractor on another large project currently under way off Leadership Way and McCarran Boulevard in northwest Reno. Kromer Investments Inc, which owns more than 3,000 apartment units in the Reno-Sparks market, has begun site work at The Villas at Keystone Canyon. The project consists of 288 units that are a mix of one- two- and three-bedroom apartments.
Witt says it feels good to once again be developing new product in the market. Silver Wing Development entered the market in 1995 with a large land position in the North Valleys.
“I love to produce things and be creative, and really for about five years I was prevented from doing that,” Witt says. “The multi-family market here had not seen any new development since 2008 or 2009. But we kept our credit clean, paid everyone off and came out other side with a hope and prayer to resume operations; that is why we are able to attract capital to these projects.”
Witt says Mechanics Bank of Richmond, Calif., and City National Bank helped fund the projects in conjunction with several high-net-worth investors with whom he has longstanding ties.
“Both of the banks are out-of-state, but we couldn’t find an in-state bank due to the size (of the projects),” he says.
Silver Wing Development had planned on redeveloping the area around Virginia Lake in 2007, but the economic collapse of 2008 halted the project.
“We took a breather, stepped back and let that project sit until we felt the market was at a point where we are seeing positive rental growth and decent occupancy,” Witt says.
To make room for the Edgewater project, Silver Wing will tear down an existing 110-unit complex it owns. It gave tenants notice in November, and the last lease expires at the end of May. Demolition on the 10-acre site will commence in June, and units are expected to be ready by late first quarter of 2015.
Redevelopment was the right choice because of the unique draw of Virginia Lake, Witt adds. Silver Wing Development also is working with the City of Reno to install a water circulation system at the lake that would greatly improve its water quality.
“The project is good for the marketplace, and we want to improve that part of town,” Witt says.
The Bungalows at Sky Vista also are unique, he says, because they all will be single-level units with attached garages and large private backyard patios. The clubhouse already is framed, and construction on the first phase of units is expected to be finished in May.
Myan Management will handle leasing and management of the property and expects to begin preleasing in March.
Roland Montoya, regional manager for Kromer Investments Inc., says construction of a new apartment complex is a new direction for the firm. Kromer typically buys existing apartment complexes, but with out-of-state money snapping up apartment deals at premium prices, the timing was right for Kromer to develop its own project.
“So few deals are coming through the pipeline, and the ones that are coming in are kind of being snatched up by outside money that is kind of overpaying,” Montoya says. “We are not going to put ourselves in that position. We felt time was right to build rather than overpay for an existing complex.”
Kromer picked up developable land a year ago with the intent to go vertical on a new multi-family project. The company hopes to begin preleasing at The Villas at Keystone Canyon by September or October.
“There is a lot of economic uncertainty still, so priority No. 1 for every single small business owner should be survival … And this second round of PPP is basically the lifeline to survive.”