By Jon Peterson
San Mateo, Calif.-based Acacia Capital Corporation has acquired its first apartment property in Kirkland with the $40.9 million acquisition of the 200-unit Vue Kirkland complex located at 11733 Northeast 131st Place.
“We like the Kirkland market and the east side of the Seattle market in general. There are a lot of technology workers in this part of the Seattle market that have a demand for rental housing. The property that we purchased is about a half a mile from the Totem Lake Mall that is going through a re-development, which will be important for the area,” says Andrew Grubbs, an acquisition analyst for Acacia Capital.
The Totem Lake Mall is now owned by El Segundo, Calif.-based CenterCal Properties. This real estate investment firm took over ownership of the property in April of this year when it paid a reported $35.5 million to acquire the property. The redevelopment of this property is still in process. The current tenants in the property include Ross, Big Five and Trader Joe’s.
The cap rate on this transaction for Vue Kirkland was 5 percent. This return is based on the property’s current net operating income. The acquisition of the property included 35 percent equity and 65 percent debt.
This property has very strong occupancy. “The current occupancy of the asset is 96 percent. This means it fits in well with the overall apartment occupancy of 95 percent of the Kirkland apartment market. One of the reasons for this is that Kirkland is not seeing much new apartment development in the region,” said Grubbs.
The seller of the property was Palo Alto, Calif. based Pacific Urban Residential.
Acacia Capital likes apartment properties that are on the East side of the Seattle market. “We prefer assets in this region as there isn’t all the new development like you are seeing in the downtown area. The East side still has the benefit of attracting a lot of technology workers for their housing. This kind of tenant is what we have in many of the units in the Vue Kirkland property,” said Grubbs.
Acacia Capital hopes to buy more properties on the East side of Seattle. The investor owns two other properties in the area totaling 425 units. One of these assets is located in Bellevue.
