83-unit townhome project coming to Spanish Springs

Las Vegas-based Leggera Development will break ground in early May on an 83-unit townhome project that’s at the front door of the master-planned Five Ridges development off Highland Ranch Parkway in Spanish Springs.

Leggera Development purchased the 6.14-acre site fronting Highland Ranch Parkway from Paradiso Communities of Reno, said Jason Thompson, principal at Leggera Development. Leggera intends to construct all three-bedroom, two-and-a-half bathroom townhomes with attached two-car garages.

It’s an underrepresented segment of housing across the Truckee Meadows, Thompson added.

“There is a lack of townhomes in that area,” he said. “Townhomes are about 5 to 6 percent of the new homes being built in Reno. There’s a lack of product in the market, so we acquired a few parcels of land.

“It fits a niche that we thought the market needed – and still needs more of. We are still looking for deals to fill that townhome niche whether it's (building) for sale or for rent.”

Five Ridges is the second townhome development project in Northern Nevada for Leggera Development. The company is fee-building a 79-unit townhome in south Reno near Huffaker Park.

Leggera Development specializes in building townhomes and multifamily apartment complexes, Thompson noted. Prior townhome projects were mainly sold to individual buyers, but as the build-for-rent model became more prevalent across the country Leggera started getting inquiries from institutional buyers to construct build-for-rent housing projects.

The Five Ridges project is a direct result of those queries from institutional capital, Thompson said.

“This is our second deal in the Reno market,” he said. “The more research we did on Reno, the more we really liked it. We like the demographics, employment market and number of high-paying jobs, along with the influx of people coming in from Northern California.

“We wanted a project in south Reno, which we have, as well as in north Reno, Sparks, and the west side of Reno, which we haven’t yet been able to get our arms around,” Thompson added. “We really like the (Five Ridges) parcel because of its location at the entrance of the Five Ridges master plan. We love the views and the size of it. It’s really the only attached townhome product within that master plan.”

Townhomes also fill another niche for people who can’t afford to buy, Thompson said. Three-bedroom townhomes also offer a larger living footprint than most apartment complexes, he added.

“We see townhomes as a totally different product than apartments,” Thompson said. “There are quite a number of apartments being built around that area, but townhomes fit a niche that apartments don’t. Apartments are (usually) one to two bedrooms, and most townhome projects are three bedrooms.

“There’s a gap when it comes to affordability, especially in Reno,” he added. “The (mortgage) if someone buys a townhome unit is usually more expensive than it is to rent — there’s a gap between leasing and buying. For-lease provides a product for homeowners who want to buy but can’t afford to.”

Leggera Development is targeting institutional buyers for the project as it comes out of the ground. The first units are expected to be delivered in the spring of 2025, with a full construction window of up to 24 months, Thompson said. Townhomes will be leased as they are completed, and leasing will be contracted to a third-party property management company.

“We will continue to build out and stabilize the property with the long-term goal of selling the project,” Thompson said. “There are plenty of institutional buyers that want to be in the Reno-Sparks market with build-for-rent housing.”

That represents a shift from previous years, Thompson noted. Historically, Reno was overlooked by institutional investors due to its modest size compared to major markets; however, those investors now consider Reno a viable investment option for their capital, he said.

“Prior to the last few years, when it came to institutional capital, Reno just wasn’t on the radar,” Thompson said. “That has changed over time because of Reno’s positive fundamentals. We are finally starting to see institutional capital look at Reno as a viable market, which is great.”

To that end, Jared Glover, senior director of Investment Sales for Berkadia Nevada, helped secure $11.53 million in joint venture equity for the Five Ridges townhome project. Leggera’s Thompson said that securing equity funding in a time of high interest rates and economic uncertainty speaks to the strength of Northern Nevada’s housing market.

“Getting any deal done in multifamily or build-to-rent is exceptionally challenging right now,” Thompson said. “Jared and his team lined up debt and equity that made sense in an environment where nobody really wants to be putting their capital out there.

“Getting a deal like this getting done with institutional equity partners speaks highly of the Reno market in general,” he added. “You are starting to see more institutional capital coming in, and that speaks highly of where the region is at today and the potential for where it’s going to go in the future.”