Garden Apartment

Low-rise apartments set on a sizable, landscaped plot and typically multiple buildings operating under a single management. They are characterized by being surrounded with lawns, trees, and gardens. These apartment subtypes are most often located in suburban areas, offer access to a backyard patio, and are pet friendly.

Source: NCREIF

Putting ‘Garden Apartment’ in Context

Overview of the Scenario

Greenridge Residential Partners, a real estate investment firm specializing in multifamily acquisitions, is evaluating the purchase of Willow Creek Gardens, a 200-unit garden apartment community located in suburban Las Vegas, NV. Built in 1998, the property is situated on a 12-acre landscaped site, featuring well-manicured lawns, shaded walkways, and abundant greenery. Amenities include a clubhouse, a pool surrounded by lush foliage, and walking paths that connect the property’s eight low-rise buildings.

The apartments are primarily two-bedroom units averaging 950 square feet, with private patios or small fenced-in backyards—perfect for pet owners, a key demographic in the area. This makes Willow Creek Gardens highly attractive to families, young professionals, and retirees looking for a quieter, suburban lifestyle while staying within a 20-minute drive of the Las Vegas Strip.

Why ‘Garden Apartment’ Fits This Case

Garden apartments, by definition, are low-rise apartment buildings set on large plots of landscaped land, often providing tenants with access to green spaces. Willow Creek Gardens exemplifies this asset type. The property’s configuration of detached and semi-detached buildings creates a community-focused atmosphere, and the generous green spaces, which include picnic areas and outdoor grills, enhance the tenant experience. These features help differentiate Willow Creek Gardens from more urban, mid-rise apartment options in Las Vegas.

The Core-Plus Investment Strategy

Greenridge Residential Partners sees this as a core-plus opportunity. While the property is currently 93% occupied, the average rents of $1,300 per month are approximately 10% below the market rate for comparable garden-style apartments in the Las Vegas metro. Greenridge plans to invest $2.5 million ($12,500 per unit) in light value-add improvements, focusing on modernizing unit interiors and upgrading common areas. Planned renovations include installing new stainless-steel appliances, granite countertops, and luxury vinyl plank flooring in each unit, as well as replacing aging landscaping with drought-resistant plants to reduce water costs—a crucial move in the desert environment.

Financial Snapshot

• Purchase Price: $40 million ($200,000 per unit)
• Renovation Budget: $2.5 million ($12,500 per unit)
• Target Stabilized NOI: $2.6 million
• Target Cap Rate Upon Stabilization: 5.5%
• Stabilized Value Estimate: $47.3 million

Key Takeaway

This hypothetical scenario illustrates the concept of garden apartments through the lens of a core-plus investment in suburban Las Vegas. The property’s expansive landscaping, low-rise design, and focus on outdoor spaces are hallmarks of the garden apartment subtype. For investors like Greenridge Residential Partners, such properties can provide opportunities to achieve higher returns by combining stable cash flow with modest value-add improvements.