By Meghan Hall
After decades of ownership, the owner of two twin apartment buildings on the South Slope of Queen Anne has decided to sell, betting on the strength of the local multifamily investment market. The two buildings up for sale, known as The Halmark and Hamrick, total 48 units and are being brought to the market unpriced.
Lee & Associates’ Principal Candice Chevaillier, Senior Associate Daniel Lim, and Associate Dea Sumantri are marketing the property on behalf of the seller. According to Chevaillier, the properties provide an investor with the potential for immediate upside at a well-positioned asset in one of Seattle’s hottest neighborhoods.
“It’s just a quintessential opportunity for someone who believes in the future of our awesome city,” said Chevaillier. “It is a five-minute walk from all sorts of transit and retail, and future light rail coming in 2030.”
The buildings are located at 702 and 705 2nd Ave. W., and each includes 24 units. The buildings were constructed in 1946 and 1947, and each sits on a 12,000 square foot lot. According to marketing materials obtained by The Registry, the buildings’ units are all one-bedrooms that average about 651 square feet. In recent years, apartments have been updated to feature refurbished hardwood floors, among other finishes.
The properties are minutes from Centennial and Myrtle Edwards Park, as well as other attractions like the Seattle Center and the Space Needle. A multitude of local businesses, from Neilsen’s Pastries to the Golden Olive to Toulouse Petit Kitchen and Lounge.
Over the course of 2020, core Seattle neighborhoods like Queen Anne saw a slowing of activity as both investors and tenants kept tabs on the market. A recent report released by Lee & Associates notes that during the fourth quarter, about 1,894 units were absorbed, a far cry from the 12,110 units absorbed at the end of 2019. The vacancy rate also increased, reaching 7.3 percent, a slight uptick from the vacancy rate of 5.8 percent about a year ago. Asking rents also decreased from about $1,726 to $1,673 per unit.
Heading into 2021, the dichotomy between core and suburban markets remained.
“A second lockdown in Q4 slowed that and new unit absorption was measured at best,” states Lee & Associates in its report. “Suburban markets continue to see consistently high rental demand and are outperforming typically core markets, as employees continue to work from home and urban amenities remain closed.”
Lee & Associates also notes that through the end of the year, many of the region’s top multifamily transactions also occurred in the suburbs. Avana Star Lake purchased a 750-unit Federal Way asset from Kennedy Wilson for $175 million, while Inland Real Estate Group spent $119 million on Tacoma’s Village at Seely Lake.
With vaccine distribution underway, market recovery inches closer. Lee & Associates predicts that the current development cycle will finish delivering large volumes of units to the market—inventory continued to rise throughout 2020—and in time, landlords will pull back on concessions. Recovery will be well underway by 2022, when rent growth resumes and demand rises as the market balances.