An apartment complex in Federal Way, a suburb south of Seattle, sold for $85 million, or $183,190 per unit, according to public records, setting a new record for the largest sale in the area. San Diego-based multifamily property owner Fairfield Residential sold The Glen Park at West Campus Apartments to San Francisco-based privately-held Affiliates of Atwater James Multifamily Investments last Thursday.
Located at 952 SW Campus Drive, the 464 units available are one to three-bedroom flats, lofts and townhomes. The units range in prices from $1,122 to $2,454 and are between 809 to 1,538 square feet. Amenities include four saunas, sunrooms, a children’s play area, an indoor basketball court and tennis courts.
It has probably been the most active submarket in the tri-county area
Market experts agree that property in Federal Way has been peaking investors interest, which is evident based on recent sales.
“Over the last several months, there have been seven or eight deals that have hit the market that are either being marketed, under contract or have closed,” said Ben Johnson, an associate director for Berkadia Real Estate Advisors in Seattle. “It has probably been the most active submarket in the tri-county area.”
Johnson continued on to say that recent multifamily property sales have cumulatively totaled near half a billion dollars, and that he anticipates this momentum to continue through the end of the year. “I think it’s just Federal Way’s time in the cycle,” he added.
One of these sales closed a month ago, when Kennedy Wilson sold The Reserve Apartments to San Diego-Based ConAm Group for $63.8 million, or just over $159,000 a unit. This sale had previously set the record as the most sizable in the area, until the sale of Glen Park.
According to Colliers International’s 2016 Seattle Apartment Market Study, South King, consisting of Federal Way, Auburn, Burien, Des Moines, Kent, Renton, Riverton/Tukwila, SeaTac and White Center, was a market to watch in 2015. The firm’s Seattle multifamily team had predicted steady rent growth after the area had surpassed almost all of King County’s markets with an 8.6 percent rent growth. This is shown in the increase of the average rental rate going from $1,027 in 2014 to $1,115 in 2015.
The area has also maintained a vacancy rate lower than four percent, however, this may change as 2,073 new units are currently scheduled to be delivered into South King’s housing market by 2018.
The report also shows that investment sales is behind South King’s success, as the area had nearly tied Urban King, which consists of all of Seattle, West Bellevue and Kirkland, as the most active investment sales market in the region. It concluded that further growth is anticipated throughout 2016, which includes a sustained vibrancy in the investment sales market.