Apartment complexes in Nevada, including apartments in Northwest Las Vegas, are way behind on their loans: 25% of multifamily units that have been packaged as commercial mortgage-backed securities (CMBS) are in arrears. As with foreclosures Las Vegas is leading the nation, which averages 13% in arrears for apartment-backed CMBS.

With arrears running at double the national average many cash-rich investors have flocked to Las Vegas only to find that the distress is yet to translate into a flood of deal flow. Institutional money that chases apartment complexes of 100 units or more saw just 11 deals of that size in 2009, versus 17 in 2008 and 42 in 2007. It seems that banks are holding onto these assets and operating as landlords in the expectation that rents, and thus values, will rise. In established areas such as Summerlin, banks are even more reluctant sellers.

One market that is seem more trading are fourplexes, which saw 416 sold in 2009 versus 209 in 2008. The price per unit for complexes sold in Las Vegas was $40,300 in 2009 – a 44% decline on 2008. But with a 25% vacancy rate, and rents down by the same percentage the only way to generate decent yields right now is to buy below build cost, and these are terms that the current owners (banks in a lot of cases) continue to resist.