By Nancy Amdur
Two downtown Redmond multifamily properties were sold last month as the city experiences strong demand for housing amid a growing employment base and ongoing city efforts to create a more vibrant urban center.
“There’s a lot being built in the Seattle region” and Redmond, home to Microsoft’s headquarters “is a good suburban rental market,” said Jon Hallgrimson, executive vice president at CBRE Group in Seattle, who specializes in apartment and residential land sales. “Quite a bit of development has taken place in downtown Redmond.”
Chicago-based Equity Residential paid $52.7 million last month for the 149-unit Old Town Lofts Apartments at 16175 Cleveland St., according to a deed filed with King County. The six-story apartment building, built in 2014, features studio, one- and two-bedroom apartments and also includes about 7,500 square feet of ground-floor retail space. Merrillville, Ind.-based developer White/Peterman Properties sold the development. CBRE brokered the sale.
Also changing hands at the end of last month was The Luke apartments at 8280 164th Ave. NE. An entity related to Los Angeles-based multifamily real estate investment firm Benedict Canyon Equities purchased the 208-unit apartment property for $73.75 million, according to a source familiar with the transaction. The Luke, also built in 2014, features one- and two-bedroom units; amenities include a clubhouse and a fitness center. It was sold by an entity related to Resmark Apartment Living, a subsidiary of Los Angeles-based private equity firm The Resmark Cos. Brokers in the Seattle office of real estate services firm JLL worked on the deal.
These properties are among many new residential developments recently completed or in the city’s pipeline. About a dozen multifamily properties, comprising nearly 1,600 units, were built in Redmond between 2014 and 2016 or are under construction to be delivered by next year, Hallgrimson said. Most of the properties are mid-rise buildings with ground-floor retail, he added.
Apartment development in the city has been accelerating, especially since the city initiated plans to create a more urban downtown.
“The city has placed an emphasis on creating an urban town mixture of retail and residential multifamily developments,” according to the 2014 King County Assessor’s report.
Not long ago Redmond’s downtown was a “dead zone,” according to local real estate professionals. But it is undergoing a rebirth as new shops and restaurants have opened in recent years, and more people have been moving into the area. The city’s population now stands at about 59,000 and is expected to balloon to 78,000 by 2030. Also, employment in the city is slated to jump from 84,500 jobs in 2014 to 119,000 in 2030. Redmond’s median household income is $99,000, according to city statistics.
“Essentially what is happening is that Redmond is experiencing the same prosperity that the rest of the Puget Sound area is,” said Erika Vandenbrande, the city’s economic development manager.
Redmond’s Comprehensive Plan, formed in 2006, focuses the majority of its residential growth downtown and in the Overlake area, she said. The amount of rental housing being built in the city indicates “the need and the market demand for it,” Vandenbrande said. “We are able to accommodate millennials and folks who are moving out of single-family homes and want to have more of an urban lifestyle and have amenities closer,” along with families, she added.
The City of Redmond is planning a new two-acre Redmond Downtown park between Redmond Way and Cleveland Street. Several street improvements also are planned downtown to improve traffic flow and a portion of Cleveland Street was recently upgraded to characterize a “main street.”
“The end result will yield a downtown core easier to navigate by foot, bike and transit,” according to the 2014 King County Assessor’s Report.
Overlake, which is home to Microsoft and is the region’s third largest employment center with about 46,000 jobs, also is targeted for residential and retail growth. Additionally, two light-rail stations will open in the Eastside district—located three miles from downtown Redmond—by 2023.
Redmond, located about 15 miles east of Seattle, is a technology hub home to nationally known companies such as Nintendo and AT&T Mobility along with Microsoft. The Terex Corp. unit Genie Industries, which manufactures construction lifts, also is based in Redmond.