The 177-unit Redmond apartment community Milehouse changed hands this month as Foster City, CA-based Legacy Partners sold the complex to Highlands Ranch, CO-based UDR. The transaction closed on November 9th, 2016, according to public documents, and UDR paid $68,454,010, or roughly 387,000 per unit. Pete Shelton and Kim Grant from Institutional Property Advisors worked on the sale.
The apartment community, which was completed in 2015 is located at 8300 160th Ave NE, and it features studio, one and two-bedroom apartments, in what it calls an “urban oasis.” Amenities in the complex include an outdoor terrace, fitness center and a resident club room. Rents in the complex start from $1,970 for a one-bedroom apartment and go up to $3,798 for a two-bedroom unit. Nine apartments were available for rent at close, a 95 percent occupancy.
Legacy’s exit out of this complex is by no means an exit out of the market. The company continues to be a player in suburban communities across the region. In November of 2016, the company acquired a $31 million site with a Chinese partner for a development in downtown Redmond located at 16425 Cleveland Street. The property as it stands now has a roughly 70,000 square foot strip shopping center. It has short-term leases in place at the moment, which will give the new owner some income while the property goes through the entitlement and permitting process.
The performance of the Redmond apartment market in the broader Seattle market make it very attractive for Legacy to grow its portfolio in that region. “The current vacancy for apartments in that market are 3.5 to 4 percent. On a year-to-year basis over the past 12 months, rental rate growth for apartments has been 5 to 6 percent. We are starting to see this level off a little bit,” said Kerry Nicholson, a senior managing director with Legacy.
Earlier this summer, Fairfield Residential LLC purchased four parcels totaling 1.7-acres, in downtown Redmond near Microsoft’s headquarters, for $6.2 million. The San Diego-based developer plans to build a six-story 360-unit mixed-use multifamily community on the site called Bear Creek, and anticipates that it will be completed by early 2019, according to a press release issued by ARA, A Newmark Company in Seattle.
Bear Creek is expected to promote the acceleration of transforming downtown Redmond into a vibrant, urban center where mixed-used residential and commercial developments are available near the city’s high-tech hub that has been created by Microsoft and orbiting companies. According to the City of Redmond, the downtown community currently provides more than 10,000 jobs for its 6,000 residents.
Redmond’s city center is believed to be on track to double its population by 2030 once the additional public transit is available. Plans to extend Sound Transit 3’s Eastside Light Rail from Redmond Technology Center into downtown includes a proposed station within a few blocks of Bear Creek Parkway, according to ARA Newmark’s release.
In Redmond, nearly 900 apartments are set for completion in 2016, with another 191 units in 2017 and 1,513 in 2018, according to a report by Dupre + Scott Apartment Advisors. The average rental rate in the Eastside is $1,716, or $1.75 per square foot. There are 278 residential buildings that provide 41,656, of these only 3.5 percent are vacant, says the report.
