A foreclosure auction for two apartment complexes in the Puget Sound region is slated to go forward this week. On Friday, both multifamily communities – one in Kent and one in Tacoma – will be auctioned off in Pierce County, according to a report from the Puget Sound Business Journal. The first development is the Tacoma Trax apartments, a 115-unit project currently under construction at 415 E. 25th St. in Tacoma. The second is the Madison Plaza apartments, a 157-unit complex completed last year at 102 Madison Ave. in Kent.
Both properties were placed into receivership on March 20. The outstanding loan balance for both properties, which share the same construction loan, amounts to approximately $36 million, according to previous reporting from The Registry. A foreclosure auction was originally scheduled for July, but it was postponed until this month.
DMG Capital and GIS Companies, formerly known as GIS International Group, are partnering on both projects through limited liability companies.
Lender Parkview Financial initiated the foreclosure proceedings. At the time, the developers owed Parkview a total of $2.5 million in past-due payments. Furthermore, Safehold, the owner of the land beneath the project sites, filed a $3 million lien against the developers. Several other liens from contractors in King and Pierce counties have also been filed in recent months.
In November 2021, the developers secured a cross-collateralized $54.5 million construction loan for both projects through Los Angeles-based Parkview. At the time, Parkview CEO Paul Rahimian expressed confidence in the need for multifamily development in the Seattle area, given the region’s business and population growth.
GIS held a groundbreaking ceremony for Tacoma Trax in January 2022, which was attended by local dignitaries. The development aimed to be the first transit-oriented project in Tacoma’s Dome District neighborhood, situated across the street from a Pierce Transit hub. The plan included allocating a quarter of the Trax units for lower-income renters, with the city of Tacoma granting a 12-year multifamily tax exemption as part of an affordable housing development initiative. Additionally, the building was intended to house an indoor farmers market.