Building in small but expanding north Reno communities like Lemmon Valley and Stead was a niche that would eventually prove extremely fortuitous for the family-owned real estate development and property management company. ERGS in February divested a six-property portfolio consisting of 1,077 doors across eight assets for $302.5 million, or just north of $280,000 per unit.
It’s the largest apartment deal ever recorded in the state of Nevada. MG Properties Group of San Diego, along with investment firm Osso Capital of New York City, were the buyers.
Both companies declined interview requests from NNBW.
Built between 1964 and 2021, the properties read like a timeline of ERGS’ development efforts in North Valley and a stone’s throw west of the University of Nevada, Reno:
North Peak Apartments, 352 units
Silver Lake Apartments, 352 units
Sierra Sage Apartments, 232 units
Vale Apartments, 40 units
Vale Townhomes, 16 units
Peavine Peaks, 30 units
Oak Manor, 47 units
Angel Street Apartments, 8 units
“These units basically represent every decade since the 1960s,” said ERGS President Gregory Peek, who joined ERGS in 2000 as its vice president.
George Peek rolled the dice when he built Sierra Sage Apartments in Stead in the 1990s. Gregory Peek said people thought his father was crazy for constructing a 232-unit apartment complex that far from the urban core.
“It was new for that market, but it turned out OK for us,” Peek said.
Silver Lake Apartments followed in the 2000s, and more recently, North Peak Apartments in 2018.
Peek said the timing of the sale was right because the multifamily apartment market fundamentals are so favorable for sellers – but ERGS wasn’t even shopping its portfolio.
“We never wanted to sell – it was the furthest thing from our minds,” he said. “We were approached, and we gave them a number I didn’t think they would ever hit ($300 million), but they did. In fact, they exceeded the number.”
The family will earmark a significant portion of its proceeds to fund the Peek Family Charitable Foundation, he added.
“The foundation will allow us to participate in the community at a different level and in a different way,” Peek said. “Reno has been very good to us. I was born and raised here, and my kids are being raised here. We love Reno, we believe in Reno, and we want to continue working to help keep Reno the great place that it is for the future.”
The Peek Family Charitable Foundation will have an initial focus on quality-of-life improvements, open space and trails improvements, enhanced outdoors opportunities, and scholarships.
“We’ve been blessed with a lot of luck and opportunity,” Peek said. “We want to help kids who want to prepare themselves for the future by increasing their opportunities for success. There are a lot of people out there who just don’t have the same opportunities that we were blessed and lucky to have.”
ERGS will continue to build multifamily housing in Northern Nevada, Peek said. The company is currently constructing a 216-unit complex in Fernley and will seek additional opportunities to develop multifamily housing in tertiary markets in Northern Nevada.
“We are looking at the outer markets because that was part of our success,” Peek said. “We will be looking at more opportunities in Fernley, we have property in Silver Springs, and we are looking at property in Churchill County. We also have some interests in Reno, and there’s a good chance we will be doing more development in Reno as well.”
ERGS was formed in 1959 by Merle and Esther Peek, Gregory’s grandparents. The company name, ERGS, is an acronym representing family members Esther, Ronald, George and Stephen. Gregory Peek began working at the family business before high school and even helped construct some of the buildings at Oak Manor on Oak Street by the university back in 1981.
Gregory Peek said that ERGS had a headcount of 65 employees, and more than half were absorbed by MG Properties following the acquisition. Ken Blomsterberg, Ryan Rife and Daniel Winrod of Marcus & Millichap represented ERGS in the transaction and also procured the buyer.
“We are grateful and lucky,” Peek said. “We are three generations that have worked hard – but we also have got a great team; we did not do this by ourselves.
“Selling the majority of our portfolio was hard for us to do,” he added. “We really had to take some time to get comfortable with it, and in many respects we are still decompressing from it. We are still figuring out what our new lives will look like.
“We are still going to be active in this community and doing what we believe will make our community a better place to live,” he added. “We will just be doing it a little bit differently, and we are excited to see where the Peek Family Charitable Foundation goes and what the future holds.”