By Meghan Hall
A modest apartment complex in the popular neighborhood of Queen Anne has traded hands. According to public documents, the Queen Anne Garden Apartments sold for $9.035 million in a transaction that closed on May 5th but was just only recently recorded. The seller was a private entity associated with QAG Partners LLC of Woodinville, Wash., and David Yuchasz. The buyer, Willow Lake III LLC, is associated with Milestone Properties, a local apartment investment and management company.
The apartments, located at 1250 5th Ave. N., were originally constructed in 1991. According to King County parcel data, the building has 38 residential units on-site, bringing the per-unit price to about $237,800. According to Kidder Mathews, who represented Milestone Properties in the transaction, the residents paid April and May rent at above a 95 percent collection rate.
Asset pricing took place in December, while the appraisal inspection took place just before the shelter-in-place order took effect.
“The timing of the interest rate lock occurred in a brief window of time, which allowed the buyer to secure an exceptionally low interest rate,” said Swanson, an executive vice president at Kidder Mathews in a statement. “The buyer and seller were highly professional and worked in a partnership that resulted in a win-win for both sides.”
The property is in a centrally located part of Seattle, just blocks from the Lake Union waterfront and Facebook’s Dexter Ave. offices. A few minutes’ drive to the west and there is the Queen Anne community pool, The Seattle Gym, and a shopping center anchored by major retailers such as Trader Joe’s and Safeway. The Westlake Steps and the Northeast Queen Anne Greenbelt are also located nearby.
The transaction comes at a time when sales volume is down across many different asset classes throughout the Puget Sound. Prior to the advent of COVID-19, the Puget Sound region was one of the most active investment regions in the United States over the past several years, according to Kidder Mathews, who issued a preliminary report on the health of the apartment market in late February. In 2019, there were 353 apartment sales for a total volume of $7.37 billion. The average price per unit came in around $266,000. Urban King County, where Queen Anne is located, accounted for 40 percent of all apartment sales in 2019—and demonstrated the highest pricing and lowest capitalization rates.
Many questions as to how the multifamily sector will fare in the coming months. As of May 1st, Kidder Mathews also reported collection loss on 44,000 Seattle area apartments, doubling from 2.9 percent in January to 6.6 percent as of mid-April. Seattle was pegged for a six percent year-over-year rental rate growth in early March; however, since then, rental rates have largely plateaued at $2.32 per square foot, on average.