The multifamily investment sales market across the greater Puget Sound region continues unabated. In a transaction that closed on July 28, 2022, Newport Beach MIG Real Estate purchased the 104-unit Cedar Rim Apartments in Newcastle for $53 million, or just around $509,615 per unit. The seller was Denver-based Aimco, which owned the property since 2009 when it paid $17,680,000 to acquire the asset.
Cedar Rim Apartments is located at 7920 110th Ave SE in Newcastle, an Eastside suburb of Seattle, just south of Bellevue. The 1980 vintage property features a mix of studio, one-, two- and three-bedroom units, which range in size from 562 square feet to 1,089 square feet. The units include features like a washer/dryer set, fireplace, GE energy saving appliances, private patio and wood plank flooring, according to the property’s website on apartments.com. Select homes include brand new kitchens and bathrooms with white quartz countertops, soft close designer cabinetry, stainless steel appliances and vinyl wood flooring, the website states.
Prior to this sale, Aimco owned two properties in the region. The other asset that the investor owns is the 135-unit 2900 on First in Seattle. Overall, the company has a national presence, and its focus is on value-add and opportunistic multifamily investments located in the following target markets: Northern and Southern California, South Florida, Denver and Boulder metropolitan areas, and the Northeast, according to the company’s website.
MIG Real Estate is a privately held real estate investment and development firm headquartered in Newport Beach, California. MIG invests in and develops high-quality multifamily, hotel, retail, and industrial/flex properties located in the Western U.S. and Sunbelt states, according to the company’s website. The company currently owns and operates more than 10 million square feet of retail, office, and industrial/flex uses, more than 1,740 hotel keys, and over 6,800 multifamily units, the website states.
Institutional Property Advisors brokered the sale. The team that worked on the deal included Philip Assouad, Giovanni Napoli, Ryan Harmon, and Nick Ruggiero.
Following the initial economic impact of the pandemic, the market across the region experienced a 2.2 percent annual dip in effective rent through mid-2021, according to a recent Berkadia 2022 mid-year Seattle-Tacoma Multifamily Report. At the same time, average apartment occupancy held at 95.4 percent year over year even as approximately 8,800 units were delivered.
In the last year, apartment leasing activity soared across the broader geography as a variety of employment and lifestyle options reopened or expanded, the report adds. At the same time, net absorption outpaced deliveries, which elevated metrowide occupancy 100 basis points to an average of 96.4 percent in the second quarter of 2022. The recent occupancy rate was 90 basis points higher than the preceding five-year average.
With healthy occupancy amid 2.1 percent inventory growth, apartment operators elevated effective rent 13.6 percent year over year to an average of $2,046 per month in the second quarter of 2022, Berkadia stated. Even with the annual rise, the cost of renting was less than half the median monthly mortgage payment. In the last year, home prices across Greater Seattle swelled 15.3 percent to $794,718 in June 2022, according to the report. Apartment operators should have leeway to continue to raise rent in the near term as metro payrolls grow a projected 2.3 percent over the next 12 months, the company estimated.