By Meghan Hall
The second quarter of 2019 was an active one for the Seattle investment market, with both large institutional and local investors targeting key assets close to job and transportation hubs throughout the region. That momentum has carried into the third quarter, particularly in the multifamily asset class, where numerous transactions of varying sizes are keeping deal volume high. Most recently, the Arkona Apartments in downtown Seattle sold for $13.5 million, or just under 229,000 per unit, as indicated in King County public documents. Seattle-based Gibraltar Investment Property Solutions purchased the 59-unit asset from a private owner associated with Li-San Huang of Laguna Beach, Calif.
The property is located just outside of downtown Seattle at 107 First Ave. N. The building, originally constructed in 1908, totals 43,712 square feet. According to the popular rental listing site apartments.com, the complex includes a mix of studio, one- and two-bedroom apartments, as well as on-site laundry and a Sauna facility. A surface parking lot is also part of the property, although the parking fee for residents is $150 per month.
The Akrona Apartments are also extremely well-located, less than two blocks from Myrtle Edwards Park and the Puget Sound. Numerous entertainment venues, from KeyArena at Seattle Center to the Space Needle to the Pacific Science Center and KOMO Plaza, are all also within walking distance. Nearby restaurants include Broadfork Café, Uptown China and Buckley’s in Queen Anne.
According to a second quarter multifamily market report released by brokerage firm Marcus & Millichap, the dynamic local economy continues to put pressure on the rental housing market, as rates and property values continue to rise. Institutional investors, in particular, states the report remain a major participant in the Seattle metro region when it comes to multifamily real estate. The region’s wide variety of employment nodes, as well as expanding infrastructure and public transportation has meant that investors are not only keen on acquiring assets in Seattle, as Gibraltar has done, but throughout the Eastside and suburbs in an effort to maximize returns.
The transaction volume, Marcus and Millichap predicts, will remain elevated throughout the year, as excise taxes on sales greater than $3 million will increase to three percent from the current 1.28 percent. This will only spur potential sellers to move forward with a transaction prior to the end of the year.
Other recent multifamily transactions within Seattle include the sale of the Chroma SLU Apartments in South Lake Union for $114 million, or about $415,000 per unit, and the Perry Apartments in First Hill for $96 million, or just under $460,000 per unit. The buyer of both properties was IRP Chroma Apartments LLC, or Iconiq Capital, based out of San Francisco. Earlier this month, Concord Pacific, the largest master-planned urban community builder in Canada, purchased a 38,934 square foot half-block in downtown Seattle in a multifamily development joint venture with HB Management. The two-phased sale totaled $60 million, and plans are currently under review to construct two, 45-story residential towers — some 900 residences — at the site.
According to Gibraltar Investment Property Solution’s website, the firm focuses on managing assets as opposed to development. The firm has been managing multifamily properties since 1998.