By Jack Stubbs
On September 25th, San Diego, CA-based property investment and management company RedHill Realty Investment sold a two-building apartment property in Kent for $34.5 million. The buyer of both properties was Latigo Management Inc., a property management company based in Scotts Valley, CA.
Located at 9626 S. 252nd St., the property sold for $34.5 million or around $205,357 per unit, according a statement from IPA Capital Markets, which arranged $23,391,000 in acquisition financing.
Giovanni Napoli, Philip Assouad, Ryan Dinius, and Sidney Warsinske at IPA represented the seller and procured the buyer for the property.
“Situated within one of the most sought-after multifamily markets in the nation, RedHill Pines is a well-maintained asset that has received recent interior renovations and offers the ability to add further value through a multitude of avenues,” said Philip Assouad, IPA senior managing director, in a statement. “Just 30 minutes from downtown Seattle, the property is centrally located to the Eastside tech hub, downtown Tacoma, Kent Valley, Renton, and Sea-Tac International Airport.”
The 10-building multifamily complex is made up of the 98-unit RedHill Pines, which was built in 1980, and RedHill Pines North, which comprises 70 units constructed in 1988. The two communities are adjacent to one another and share a centralized clubhouse and leasing office in RedHill Pines. The average floor-plan size is 796 square feet and all apartments have private patios or balconies.
Ray Allen, first vice president IPA capital markets, and Seth Heikkila, vice president IPA capital markets, arranged the financing with an agency lender. “We’re very pleased with the loan terms we negotiated in the marketplace for our longstanding client, and thrilled that the IPA team listed the perfect asset to help them strengthen their portfolio,” commented Allen. The 10-year loan is fixed at 3.845 percent with five years of interest-only. The loan-to-value is 68 percent.
The property sits adjacent to French Field and just north of Kent-Meridian Highschool, and are roughly two miles southwest of downtown Kent. The properties are also roughly twelve miles south of Sea-Tac Airport via State Route 167 and ten miles south of Renton.
“The Puget Sound region has experienced record growth over the past decade and shows little sign of slowing down as the technology, e-commerce, and internet industries that have led much of the growth continue to expand,” commented Dinius. “In the past eight years, as more residents have moved to the area to fill high-paying positions, King County’s population has grown by 243,435.”
RedHill Realty Investment operates nationally in the multifamily sector, but focuses primarily on Western U.S. markets including Seattle, Washington; Portland, Oregon; and the San Francisco Bay Area, according to the company’s web site. In terms of single-asset value-add opportunities, the company looks to acquire properties for between $20 million and $100 million.
According to The Registry’s reporting, RedHill’s last acquisition in the Puget Sound region occurred in Spring of last year. In April of 2018, the company spent $20.85 million, or approximately $198,571 per unit, to purchase the 105-unit Align Apartments in Federal Way—located at 35434 25th Ave. SW.—from Madison Residential.
The sale of the two Kent apartment properties comes a couple of weeks after the sale of the 302-unit Indigo Springs Apartments, also located in Kent at 11101 SE 208th St. On September 11th, Los Angeles-based Decron Properties spent $78.8 million, or about $261,000 per unit, to acquire the property from Beverley Hills, Calif.-based Kennedy Wilson.
The city of Federal Way, which is about eight miles northeast of Kent via State Route 516, has seen a number of multifamily change hands over the last few months. In mid-June 2019, RISE Properties and Aegon Real Assets U.S. announced their $43.25 purchase of the 198-Unit Bryson Square Apartments, and subsequently in early August announced their purchase of the Waterbury Park Apartments in Federal Way for $56 million.
Beau Madsen, Investment Manager at RISE, stated at the time of the August transaction: “Acquiring Waterbury Park Apartments is an exciting opportunity to restore an aging, well-located multifamily property in the context of a favorable financing environment. We look forward to positioning the asset to better meet the quality and amenity expectations of today’s renter, while also providing RISE investors exposure to the Federal Way and Puget Sound multifamily markets.”