By Jack Stubbs
As 2019 winds to a close, it appears that investors are intent on splashing the cash in the Puget Sound region, with two apartment properties in Kent—the Lake Meridian Apartments and the Royal Firs Apartments—having sold for a combined $79 million across two separate transactions that were recorded on December 19th, King County records show.
The buyer of the properties was Los Angeles, CA-based Phoenix Realty Group (PRG), a real estate investment firm that acquires, develops and operates multifamily properties across the U.S. The seller was Hanover Real Estate.
PRG will operate the rental communities and plans to renovate, upgrade, and modernize the properties to offer an attractive option for tenants in the area.
“Seattle is an important target market for growth for PRG,” said Keith Rosenthal, PRG’s president and co-founder in a statement. “Given the strength of the local economy, wide-ranging outdoor activities and the presence of employers such as Boeing, Amazon and Microsoft, it is a compelling region for renters of all ages. We expect to acquire additional properties in the Seattle market over time.”
The 175-unit Lake Meridian Apartments sold for $39.6 million, or around $226,285 per unit. The Royal Firs, comprising 186 units, traded for slightly less, with a sales price of $39.4 million, or approximately $211,827 per unit.
Lake Meridian, located at 14901 SE 272nd St., is a two-story property built in 1987, and offers one-, two- and three-bedroom units that range from 850 to 1,250 square feet and rent for between $1,250 and $2,025. The Royal Firs property, which is located at 24028 110th Place SE—roughly four miles northwest of Lake Meridian—offers the same unit size and rental rates as Lake Meridian, according to the properties’ listings on apartments.com. Both complexes include on-site property management services and clubhouses, and also convenient access to various open-spaces and parks such as Clark Lake Park, Meridian Valley Golf Club and Lake Meridian Park.
Both of the properties are located roughly two miles from the Kent Hill Plaza Shopping Center—which sits at 25618 – 25928 104th Ave SE—which is home to a variety of retail tenants. According to Wallace Properties’ listing for the retail plaza, the local population around the Kent Hill Plaza area has been on the rise over the last few years. As of 2014, the local population stood at just under 244,000 within a five-mile radius, rising to around 270,900 as of 2019, marking an eleven percent increase.
Located approximately 30 minutes from downtown Seattle, Kent has a population of more than 125,000 people and upwards of 60,000 employers. Both communities are accessible to highways, acting as a commuter suburb to the Sound Region’s largest employers, like Boeing in Renton, and tech hubs in downtown Seattle and Bellevue, all approximately 20 miles from the properties.
“The strong population growth of the Seattle market coupled with limited supply in the Kent submarket solidified our decision to partner with PRG,” said Ash Baraghoush, senior director with HREI. “PRG’s experience in renovating and repositioning assets will create significant risk-adjusted returns for the venture.”
Founded twenty years ago, Phoenix Realty Group has a portfolio comprising $1.4 billion gross real estate assets, including approximately 8,000 apartment units, according to the company’s web site. The company owns a number of multifamily communities in California, Colorado and Arizona.
There have not been all that many multifamily property sales in Kent in recent quarters–with most of the assets sold having been commercial or industrial—although the sale of the Lake Meridian and Royal Firs properties comes just a few months after another multifamily complex in Kent traded hands.
In early September, Los Angeles-based Decron Properties continued its ongoing expansion in the Puget Sound region with its acquisition of the 302-unit Indigo Springs Apartments—located at 11101 SE 208th St.—from Beverley Hills, Calif.-based Kennedy Wilson for $78.8 million, or just under $261,000 per unit.