By Meghan Hall
Well-located multifamily properties continue to attract interest from investors, and deals throughout the Puget Sound continue to close. In a sale that was finalized on August 10th, but was only recently recorded, the Flats at Interbay apartment complex was sold for $33.75 million, or about $288,000 per unit. G&G Interbay Partners, a Seattle-based limited liability company, disposed of the property, while the buyer was The Flats at Interbay Limited Partnership, affiliated with RISE Properties Trust and Cigna Investment Management. The transaction was brokered by Berkadia and is the third joint venture between the two companies.
“There has been a meaningful change in preferences amongst urban renters over the last few months,” said Barrett Sigmund, President of RISE in a statement. “We expect that larger one-bedroom units and dens, which are common unit types at this property, will grow in popularity as working from home becomes increasingly viable. In addition, features of this asset like its walkability to a neighborhood park, golf course and grocer have historically been sought after by renters and are even more important in the current environment.”
Located at 3036 16th Ave. W., the property was constructed in 2014. It features 117 units, ranging in size from 498 to 832 square feet and all units are one-bedroom residences. Units come equipped with hardwood floors, two-tone cabinetry, modern appliances, USB charging outlets and full-sized washers and dryers. Units also come pre-wired for high-speed internet and cable. Rents for open one-bedroom units begins around $1,578 per month.
Community amenities include a 24-hour lounge with kitchen and pool table, a fitness center, rooftop deck, barbecue and picnic area, clubhouse and garage parking. The property is managed by Thrive Communities, a Seattle-based property management firm with 14,000 units in its portfolio.
“Team Thrive is thrilled to welcome yet another property to the portfolio today: The Flats at Interbay!” Thrive’s website states. “…Three cheers for our transition team of dedicated Thrivers who helped to onboard the property today, both remotely and from a social distance on-site. We’re excited to get to know our new residents, with one of our experienced Community Managers (yay, Kristian!) leading the office team.”
While other product types have seen a slowdown in deal volume, multifamily product throughout the region continues to sell. At the end of July, the Delano Apartments in Redmond traded for $51.5 million, and in an even larger transaction, Holland Partner Group sold a 40-story residential high-rise in downtown Seattle for $320 million, or about $694,000 per unit.
According to an August report released by Kidder Mathews’ Dylan Simon team, there have been 83 multifamily sales between January through June of this year, totaling $506 million in volume. The average price per unit has come in at $228,648. By comparison, all of 2019 saw 353 transactions, at $7.37 billion in sales volume. The average price per unit came in at around $266,000.
“Given that four of the first six months of 2020 saw global economies nearly brought to their knees, and the U.S. GDP was down 33 percent in Q2, it’s a surprise that any apartment sales closed,” the report notes. “For the most part, March closings were planned pre-COVID-19 and were unimpacted. April onward, however, all sales transactions were at risk of failure.”
The positive, Kidder Mathews notes, is that pricing has thus far remained stable. While pricing has not increased, current sales are closing near 2019 levels, evidence that investors do have faith in the Puget Sound market. RISE is just one of those investors; with its newest acquisition, the firm now owns 4,570 units across 27 properties in the Pacific Northwest