RENO, NV – San Diego-based Tower 16 Capital Partners has successfully acquired The Deco at Victorian Square, a 209-unit multifamily property located in the Reno, Nevada market. The project was built in 2021 and acquired for $43 million, well below today s replacement cost.
This marks our first acquisition in the Reno market and brings us back into Nevada where we previously owned a portfolio of 2,000 units, said Tower 16 Co-Founder Tyler Pruett. We re pursuing opportunities in Western growth markets to acquire high-quality real estate at a steep discount to replacement cost and prior-peak pricing. We have been trying to enter the Reno market for years and remain firm in our conviction that in-migration from more expensive markets will continue, driven by increasing job opportunities, low cost of living and attractive lifestyle amenities.
Tower 16 has made similar moves in markets throughout the West, acquiring nearly 7,000 units representing assets of over $1 billion in Southern California, Las Vegas, Phoenix, Tucson, Albuquerque and Denver. The company seeks markets with strong rental housing fundamentals including employment growth, in-migration and a limited new supply of housing. Tower 16 is aggressively targeting new construction assets in varying stages of completion/lease-up as well as value-add opportunities in the Southwest.
The Deco is located at 955 Avenue of the Oaks in the desirable Victorian Square neighborhood of Sparks, a city just east of Reno. The property is a newly built, 10-story, podium-style multifamily community with a mix of studio, 1- and 2-bedroom apartments averaging 731 square feet. The downtown property is adjacent to the I-80 freeway close to the Tahoe Reno Industrial Center, Downtown Reno, several large hospital systems, as well as outdoor lifestyle amenities.
The Deco has performed very well and FPI Management has done a phenomenal job managing the final stages of lease-up, getting the property to 97% occupancy during escrow, said Tower 16 Co-Founder Mike Farley. The property is extremely well-built, and we plan to take it to the next level by enhancing the overall tenant experience.
Tower 16 will complete nearly $1 million in upgrades including common areas and fitness center upgrades and landscaping enhancements. The company will also add outdoor amenities including barbeques, seating and gathering areas.
We have been waiting for the right re-entry point in the Reno market and are grateful to Eastdil for the acquisition opportunity and their assistance securing debt financing in a turbulent capital-raising environment, said Tower 16 Director of Acquisitions Dave McClain. The Tower 16 team is eager to execute the business plan with our excellent investment partner and lender.
Jonathan Merhaut of Eastdil Secured represented the seller in this transaction. Eastdil Secured helped secure debt financing for the buyer, led by Lee Redmond and Greg Stampley.