By Jon Peterson
Arlington, Va.,-based AvalonBay Communities has started construction on the 378-unit Avalon Newcastle apartment project in Newcastle. The total capital cost is $110.1 million, according to the company’s 2015 third quarter supplemental financial report.
The project was started this quarter and it will have an initial occupancy one year from now with a projected completion date of the fourth quarter of 2017. A full quarter of stabilization will happen by the second quarter of 2018.
This project will mostly be an apartment development. The project does have plans to include a retail component totaling 15,000 square feet. The average rent per apartment home is projected to be $2,245 per month.
AvalonBay has been an active player in the development of new apartments in the greater Seattle market over the past couple of years. During that time frame it has started two other projects. One of these was the 124-unit Avalon Alderwood II project in Lynwood. This development kicked off during the first quarter of this year with a total capital cost of $26.1 million. A year before that it started the 249-unit AVA Capitol Hill. The capital cost of this project is $81.4 million.
Seattle continues to be a major investment market for AvalonBay. The publicly-traded REIT holds an apartment portfolio in the region totaling 3,444 units. This portfolio has an overall occupancy of 94 percent. Average rental rates on the portfolio have increased by 8 percent on the portfolio over the past 12 months. They have moved from $1,856 per month in the third quarter of 2014 to $2,005 for the third quarter of this year.
Map courtesy of Apple