San Diego-based Tower 16 Capital Partners has acquired The Deco at Victorian Square, a 209-unit multifamily property located in the Reno, Nevada, market. The project, built in 2021, was purchased for $43 million.
“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,” says Tower 16 co-founder Tyler Pruett. “We are 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 in the area, low cost of living, and attractive lifestyle amenities.”
The Deco is in the Victorian Square neighborhood of Sparks, a city just east of Reno. The 10-story, podium-style multifamily community offers a mix of studio, one-, and two-bedroom apartments averaging 731 square feet.
“We are eager to build from the momentum here and continue targeting other recently developed multifamily communities,” says Tower 16 co-founder Mike Farley. “The Deco has performed very well, and FPI Management has done a phenomenal job managing the final stages of lease-up, getting the property up to 97% occupancy during escrow. The property is extremely well built, and we plan to take it to the next level by improving critical tour path amenities and enhancing the overall tenant experience.”
The property will undergo nearly $1 million in upgrades including modernized common areas, fitness center upgrades, landscaping enhancements, and additional outdoor amenities including barbecues, seating, and game areas.
“We have been patiently waiting for the right reentry point in the market and are extremely grateful to Eastdil for the opportunity to acquire the property and appreciate their assistance securing debt financing during a turbulent capital markets environment,” Tower 16 director of acquisitions Dave McClain says. “The Tower 16 team is eager to execute the business plan with our excellent investment partner and lender.”
Since 2017, 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; Phoenix; Tucson, Arizona; Albuquerque, New Mexico; and Denver. The firm seeks markets that exhibit strong rental housing fundamentals including employment growth, in-migration, and a limited new supply of housing. Tower 16 is aggressively targeting other new construction assets in varying stages of completion/lease-up as well as value-add opportunities in the Southwest.
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.
