Home Finance Acacia Capital Sells Three Seattle Apartment Complexes for $54.2MM

Acacia Capital Sells Three Seattle Apartment Complexes for $54.2MM

Q Apartments Seattle Urban Queen Vista Seattle Mercer Island Acacia Capital Queen Anne Lo-Yu Sun Puget Sound living investing
Q Apartments

The San Mateo, Calif. -based investor just disposed of three Puget Sound assets for a total of $54.2 million.

The properties were sold to three different buyers in a transaction just before the close of the year at the very end of December 2016.

The Queen Anne apartment complex known as Q Apartments, Seattle Urban and Queen Vista sold on December 30th, 2016 for $26.5 million. The buyer was an entity associated with a Seattle business executive, Lo-Yu Sun of Mercer Island.

The Park
Acacia had owned the apartments located at 1321 Queen Anne Ave N since October of 2010, when it paid $17,850,000 for the complex, or $103,197 per unit.

The second largest complex sold was the 52-unit The Summit, located at 733 Summit Ave E. This property sold for $17 million, or just around $326,923 per unit. The buyer was an entity called CX3 Summit LLC, which listed its only affiliation with Susie and Sam Naficy of Bellevue, the owners of Naficy Plastic Surgery & Rejuvenation Center. The seller purchased The Summit in October 2010 for $9.1 million.

The smallest of the three, the 34-unit The Park, located at 1205 Queen Anne Ave N was sold for $10.7 million, or roughly $314,705 per unit, to a partnership that included an entity called The Park GJN LLC, which is associated with Giovanni Napoli, the senior vice president of Kidder Mathews in Seattle, according to one of the parties involved in the transaction. Acacia also owned this asset since October 2010, when it paid $6.3 million for the building.

The sale comes on the heels of a number of recent Puget Sound apartment transactions. Just north in Ballard, Boston-based TA Realty purchased the Ballard Public, also known as Ballard Lofts, the 99-unit, five story apartment and loft complex built in 2015. TA Realty, which worked out of its Irvine, Calif. office on the purchase, paid $47,401,000 for the two building complex, or roughly $478,797 per unit.

In another December sale, Irvine, Calif. -based SARES REGIS acquired the 238-unit Solara Apartment community in north Seattle from Denver-based Simpson Housing for $65.2 million, or approximately $273,950 per unit. This apartment complex, which was built in 2002, is located at 12736 Lake City Way NE in Seattle.

The Summit
But interest in multifamily product was not reserved for Seattle only. Renton, Redmond, Everett and Bothell were just some of the cities across the region that also saw apartment complexes trade hands in a very busy second half of the year. This is not entirely unexpected as the region continues to grow its economic and employment base.

According to a recent, third quarter 2016 Seattle-Tacoma Metro Area Multifamily Market Report by Marcus & Millichap, developers struggled to keep pace with apartment demand as housing affordability become a mounting concern across the region. The region’s strong economy, led by its vibrant job market, is boosting apartment demand and in turn cash flows, stated the report.

A 30-basis-point contraction in vacancy was posted in 2015 on net absorption of 10,000 units. In 2016, the highest inventory additions in more than 15 years pushed vacancy up 30 basis points to end 2016 at a still-tight 3.9 percent. Strong tenant demand and new inventory flooding the market resulted in effective rents increasing 7.3 percent to an average of $1,455 per month in 2016. Rents have surged 41 percent in the last five years, including a 9.1 percent jump in 2015, according to Marcus & Millichap.

However, according to a recently released fourth quarter of 2016 study by Seattle-based Apartment Insights, which looks at statistics and trends on 50+ unit properties in the King/Snohomish market, the outlook is a little less sanguine. While the vacancy currently sits at 4.67 percent, according to their figures, it had shot up from 3.99 percent from a quarter ago and up from 4.32 a year earlier. On the absorption side, Apartment Insights tracked 1,046 units rented, down from 2,043 from the third quarter, which resulted in bringing the rents down slightly in the process. With additional inventory coming on-line and apartments offering strong incentives, the research firm sees some probable cause for a slow-down.