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NRP Group takes first steps to entering Arizona, Nevada markets

Reporter: Crainscleveland

 NRP Group takes first steps to entering Arizona, Nevada markets

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Updated with a correction at 11 a.m. Thursday, August 24. Although huge estimates for population growth in the Phoenix area speak for itself, NRP Group's strategic interest in both is more nuanced. In the case of Phoenix, the addition of chip factories in the region makes it more attractive. "In Las Vegas and Nevada, there has been a concerted effort to diversify the economy from the gaming and tourist industry," Outcalt said.

"There are big investments in research to produce new companies. And the senior population in Las Vegas is growing. We're not typically building for seniors but there will be job growth for the people who care for the aging (transplant) population." Las Vegas also is dominated more by regional than national developers, he added, so NRP believes it can make a place for itself there.

Some of NRP's institutional investors are also interested in Las Vegas investments, Outcalt said. He likens it to past expansions by NRP into new markets when development might be more challenging. In this case, NRP found the right people to hire in Vegas and Phoenix, which prompted its moves there, Outcalt said.

The company also targets Colorado for expansion, Outcalt said, but it has not found the right person to hire there. The shoes that NRP Group put on the ground last month includes those of Austin Kates as vice president of development in Phoenix and Mike Moriarty with the same title in Las Vegas. Both have real estate development depth and local market knowledge in their new posts. Kates, a Phoenix native, served as a development associate at The Wolff Co., a Scottsdale, Arizona, realty investment company focused on apartments.

He led Wolff's sourcing efforts in Austin and Dallas-Fort Worth. Moriarty previously was managing partner at The Ardour Co., a multifamily real estate development and investment company in Las Vegas, where he identified project opportunities and joint ventures. Outcalt said both men report to Chris O’Neill, NRP's executive vice president of development in Texas.

O'Neill also recruited both men to NRP. "We saw what (O'Neill) was able to do with our Texas operations and he deserves the credit for this because we see having the right people as the first step," Outcalt said. O'Neill joined NRP in 2022 in Houston after working on apartments there for years for Hines, the well-known global development and realty services firm based in Houston. "We don't have to expand," Outcalt said, so finding the right people was a critical first step.

New hires also mean it may be a few years before NRP begins building in the new states, but it's prepared to patiently seek its shots. NRP, which was launched in 1994 in suburban Cleveland, now employs 200 downtown and a total of 1,000 nationally. It has developed more than $9.5 billion of projects with a total 55,000 units in the affordable, mixed-income and market-rate categories.

It follows an approach of selling some projects to recycle capital and has sold a total of $3 billion in property over its lifetime. NRP ranked as the nation's ninth-largest apartment developer, based on units started and completed, according to the 2023 ranking of multifamily development firms published by the National Multifamily Housing Council trade group.

That was with 5,024 units started in 2022, from 3,720 in 2021. While NRP is confident it can continue to grow in the current climate, Outcalt said the company believes that the greatest challenge is posed not by interest rates but by loan availability. It's seeing fewer banks vying for its business now than the past few years as bank tighten standards after the collapse of two West Coast banks earlier this year. Even so, Outcalt said, NRP is likely to retain its rank among the nation's largest multifamily developers.

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