FEDERAL WAY, Wash. (July 16,2019) – Institutional Property Advisors (IPA), a division of Marcus & Millichap (NYSE: MMI), announced today the sale and financing of Homestead, a 134-unit apartment complex in Federal Way, Washington. The property sold for $26.5 million, which equates to $197,761 per unit. IPA Capital Markets arranged $19,875,000 in acquisition financing.
“Investors have continued to be interested in multifamily assets in Federal Way because of strong rent growth and affordability compared with core properties in Seattle,” said Philip Assouad, IPA senior managing director. “Federal Way has experienced 9.6% year-over-year rent growth and the in-place rents have remained 50% to 60% more affordable than the core. Additionally, the anticipation of Federal Way light rail service beginning in 2024 has many investors looking at the area.” Assouad, Giovanni Napoli, IPA senior managing director and Ryan Dinius and Sidney Warsinske, IPA vice presidents, represented the seller, Thayer Manca Residential (TMR). They also procured the buyer, a private investor who owns 571 units in the South Puget Sound region.
Ray Allen, first vice president IPA capital markets and Seth Heikkila, vice president IPA capital markets, arranged the financing. “Our longstanding client’s purchase of this asset was timed incredibly well with the current low-interest-rate environment. Rental rates, when compared to the median income of the area’s residents, remain very attractive and made this an appealing opportunity as well,” said Allen. “For these reasons, an agency lender was very competitive and won the deal.” The 10-year loan is fixed at 3.93 percent and the loan-to-value is 75 percent.
Formerly known as Rainier Meadows, Homestead was built in 1987, recently rebranded, and 70% percent of the homes have been renovated. Community amenities include a newly renovated clubhouse with leasing office, new fitness center, new outdoor residents’ lounge, new dog park, new children’s playground, and an outdoor pool.About Institutional Property Advisors (IPA)
With a network of senior-level investment advisors located throughout the United States and Canada, Institutional Property Advisors (IPA) is qualified to meet the needs of institutional and major private investors. IPA’s combination of real estate investment and capital markets expertise, industry-leading technology, superior support services and acclaimed research offer customized solutions for the acquisition and disposition of institutional properties and portfolios.www.institutionalpropertyadvisors.com.About Thayer Manca Residential (TMR)
TMR is a Seattle based private equity firm focused on value-add multifamily investments in the Western U.S. TMR and its Principals have sponsored over $800m in multifamily investment activity, and along with their investment partners, currently control a $300m portfolio spread over 4 states. TMR is driven by a commitment to protect and grow investor capital, while delivering safe, clean and inspired homes. www.thayermanca.com