Home Finance Grosvenor Sells Redmond Apartment for $43MM

Grosvenor Sells Redmond Apartment for $43MM

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By Jon Peterson

Grosvenor Americas has sold the Peloton Apartments in Redmond for $43 million to San Mateo, Calif.-based G.W. Williams Co. The buyer of the property did not respond to several phone calls seeking comment for this story.

This deal was an off-market transaction. “Normally, we don’t sell properties on an off-market basis. We think that this is not the best way to get a true value of the property. But we were approached by a broker representing the buyer, and we felt comfortable with the price they were offering,” says Mark Purdy, vice president of investment for Grosvenor Americas. He works out of the company’s office in Calgary, Canada.

The broker involved in the transaction was Kirkland-based Turning Point Realty Advisors. “We have worked with G.W. Williams for many years on their investments in the Seattle area. Peloton was a property that we felt would be a good fit the investor to look at buying. It does have a value-add component, which is an investment strategy that the buyer has,” says David Mortensen, a senior associate with Turning Point.

Grosvenor had owned the property since 2007. At that time it had paid approximately $28.9 million to acquire the property. The seller of the asset has spent around $15,000 per unit to make improvements to the property while it owned the asset. This included improving and adding some new amenities like an outdoor heated pool and sundeck, fitness center, lounge, community barbeque and picnic area.

The cap rate on the sale of Peloton was 4.25 percent. “This return is based on the current net operating income being produced by the existing rents,” said Purdy.

Grosvenor still owns a good number of units in the greater Seattle market. “We own five properties in the marketplace that totals almost 1,500 units. Our plan is to hold onto these assets on a long-term basis,” said Purdy.

The company is looking to re-invest the sales proceeds from the sale of Peloton into additional investments going forward. Most of its recent activities in the market have been with it buying value-add properties. This would involve acquiring assets properties where the value can be increased through a renovation or expansion. Its investments in Seattle could be either buying apartments or office buildings.

Grosvenor has Seattle as one of its targeted markets for investments in apartments. The others would include Vancouver, B.C. and San Francisco. Around 78 percent of its apartment portfolio is located in these areas. The buyer owns 2,261 rental units in the U.S. and Canada.