By Jack Stubbs
Blackstone has recently made strides to significantly expand its residential portfolio in the Puget Sound Region. On Tuesday October 31st, the company acquired three apartment properties from San Diego, California-based MG Properties Group for a combined price of $79.5 million, according to public records filed with King County.
The 214-unit Boulevard at South Station Apartments in Tukwila sold for $33.4 million, or roughly $156,075 per unit; the 151-unit Discovery Landing Apartments in Burien sold for $29.8 million, or $197,350 per unit; and finally, the Arbor Chase Apartment homes, a 102-unit property in Kent, sold for $16.3 million, or roughly $159,804 per unit, according to public records.
New York-based Blackstone is one of the world’s leading investment firms. The seller, San Diego, California-based MG Properties Group, specializes in the acquisition, development, rehabilitation and management of apartment communities throughout the western United States. The three-property transaction between the two companies was recorded on November 2nd.
Built in 1979, the two-story Boulevard at South Station Apartments features a variety of unit types including studio, one-bedroom and two-bedroom units. The studio units are 425 square feet and rent for $1,081; the one-bedroom units are 625 square feet and rent for $1,114; the two-bedroom units are 825 square feet and rent for $1,593, and the deluxe two-bedroom units are 1,050 square feet and go for $1,675, according to the property’s web site. The newly-renovated units include dishwashers, private patios and balconies, spacious closets, and washer and dryer in select units. Some of the community amenities highlighted on the property’s web site include an on-site business center, fitness center, pool, a resident lounge and a 24-hour emergency maintenance service.
Located at 4708 Southcenter Blvd., the apartment complex is located 1.5 miles to the southwest of Tukwila and sitting in close proximity to both Interstate-5 and Interstate-405. Additionally, the property is just 3 miles from the Sea-Tac to the west. The complex is in close proximity to several other nearby apartment communities within a mile to the east, including 179-unit Foster Creek Apartments, 114-unit La Vista Apartments and the 266-unit Heatherwood Apartments. The property’s web site highlights the location of the complex as one of the primary features, offering easy access to Southcenter Blvd. and International Blvd, and just minutes away from one of Boeing’s corporate offices.
The three-story Discovery Landing Apartment Homes was built in 1987. The property is located at 15405 Des Moines Memorial Drive, just one mile to the east of downtown Burien and half a mile from access to both Washington State Route 518. The property is ten miles to the south of downtown Seattle via State Route 509, and just minutes from the Sea-Tac.
According to the property’s web site, a one-bedroom unit at the property is 736 square feet and rents for $1,431, with a 577 square foot one-bedroom also available. One of the two-bedroom options is 920 square feet and rents for $1,545, with the second option totaling 1,042 square feet and available to rent for $1,645. The largest unit type totals 1,178 square feet and rents for $1,853. Some of the prominent apartment amenities include extra storage space, fireplace, patio or balcony, in-unit washer and dryer, and dishwasher. Additionally, the apartment complex offers a myriad of community amenities as well, including a designated BBQ/picnic area, a business center, fitness center, covered parking and indoor pool and spa.
The third residential property in the transaction, the Arbor Chase Apartments, is a two-story complex that was built in 1980. The property is located a mile to the west of downtown Kent and just half a mile from access to Washington State Route 167. Additionally, the complex is 4 miles from access to Interstate 5, a prominent transit corridor connecting Kent with Seattle to the north. The Arbor Chase Apartment community offers two-bedroom and three-bedroom units, with the two-bedroom units totaling 989 square feet and renting for $1,345, and the 1,189 three-bedroom units rented for $1,728, according to the property’s web site. Some of the in-unit amenities include a ceiling fan, wood burning fireplace and private attached patio or balcony. Additionally, some of the community-oriented amenities for residents designated covered parking, fitness center, courtyard area, outdoor pool and laundry area and business center.
Founded in 1985, Blackstone has since become a preeminent investment firm, emphasizing its aim to “create positive economic impact and long-term value for our investors, the companies we invest in, and the communities in which we work,” according to the company’s web site. After roughly 30 years of operation, the company’s real estate firm consists of 450 professionals in 12 offices worldwide. The company is one of the world’s largest real estate private equity firms, with $111 billion of assets under management, according to its web site.
Blackstone aims to to generate attractive risk-adjusted returns for its investors across cycles and over the long term. The company aims to acquire high-quality investments at discounts to replacement cost, then improving the properties through hands-on management and targeted value-add initiatives, according to the company’s web site. Blackstone’s portfolio spans asset types, including office, retail, hotel, industrial and residential properties. As of September 30 2017, the company had 220 million square feet of office space globally. Blackstone has made its presence felt in Seattle in recent months. On September 13, 2017, in one of the year’s largest commercial sales, the company bought the Exchange Building, a 22-story 384,302 square foot commercial property located Downtown for $156.5 million from Boston-based Beacon Capital Partners.
Founded in 1992, MG Properties Group focuses on apartment investments in Southern California, Phoenix, Tucson, the San Francisco Bay Area, Las Vegas, Reno, Portland and Seattle. The company focuses primarily on underperforming or value-add communities, renovating and managing apartment communities to their highest potential, according to the company’s web site. Since its inception, the MG Properties Group has has acquired and managed over 140 properties totaling over 20,000 units—today, the company manages over 14,000 apartment homes in over 55 communities in high-growth cities in California, Arizona, Nevada, Washington and Oregon, accord to its web site. The company’s apartment portfolio has a total market value of over $2 billion. Some of the company’s other residential assets in the Puget Sound Region include Mosaic Hills, a 367-unit property in Kent and the Reunion at Redmond Ridge Apartments, a 321-unit complex in Redmond.