Los Angeles-based JRK Property Holdings has acquired its second asset in the Puget Sound region, a 225-unit apartment complex north of Seattle in the suburb of Silverdale.
The real estate firm purchased the property from joint venture Pinnacle and AEW Capital Management for $37 million, or $164,444 per unit, according to sources familiar with the deal. John Hallgrimson, Eli Hanacek, Frank Bosl and Josh McDonald in CBRE’s Seattle office represented both parties. The property was 96 percent occupied at closing.
Despite its distance from downtown Seattle and Tacoma, the Silverdale market still commands rents exceeding comparable product in South King County
Located at 12240 Daphne Road, Trillium Heights was built in 1989 and renovated about five years ago. Nine three-story buildings contain one, two and three-bedroom apartments on an 11-acre site. Amenities include wood-burning fireplaces, private patios or balconies, pool and spa, indoor basketball court and children’s play area.
“Despite its distance from downtown Seattle and Tacoma, the Silverdale market still commands rents exceeding comparable product in South King County,” said James Bloomingdale, JRK Senior Vice President and Head of Acquisitions in a press release.
Bloomingdale also said in the release that multifamily fundamentals in Silverdale are very robust due to its strong job and income growth, as well as a limited amount of new supply. He believes that these combined dynamics will make Trillium Heights a profitable long-term investment, especially as the Harrison Medical Center expansion is completed and the retail market grows around the Kitsap Mall. Another factor that attracted the buyer to the property was its proximity to Emerald Heights Elementary School, one of the top elementary schools in the region.
JRK plans to implement a modest capital improvement program in order to keep up with today’s tenant preferences. Bloomingdale says that upgrades will include faux wood floors, lighting fixtures and solid surface countertops.
According to a recent report from Kitsap County’s Economic Development Alliance, titled “Kitsap County Rental Trend,” the average rental rate has increased 12.1 percent from last year to $1,186 per month. These numbers show the county as having the third highest rental rates in the Puget Sound region, behind King and Snohomish counties, which have an average rental rate of around $1,588 per month.
PRK’s first asset in the Puget Sound was a 714-unit community in Tacoma. The Boulders at Puget Sound is located at 2602 Westridge Avenue, and is the fourth largest apartment community in the region.