By Jon Peterson
Multifamily development opportunities across the greater Puget Sound region continue to draw investor interest. As a result, a number of developers and owners have tested the market by placing properties up for sale. In a latest example of that effort, a local owner is marketing for sale two properties, one existing and one ready for development, separated by an alley in Seattle’s Lake City. One of the properties is the 103-unit Willows Court Apartments located at 12316 28th Avenue Northeast and the other is the potential Amalfi Development site located at 12337 30th Avenue Northeast. The pricing guidance on both assets was not available at this timer.
The current ownership has selected the Seattle office of Kidder Mathews to be the listing agent on the sales. Those working on the sale include Dylan Simon, executive vice president, Matt Laird, vice president, and Winslow Lee, associate. The two assets could be sold to a single institutional investor, for example, or one capital source could buy the existing asset while a developer could purchase the site for the new project.
There has been some renovation already started on Willows Court, which included adding 24 washers and dryers to the units. Additional work that could be planned for the future includes modern cabinetry, adding microwaves and stainless-steel appliances. The expectation is that when all of the value-add work is completed, new ownership will be able to have rental rate increases of around 20 percent to 25 percent, according to the property’s offering document.
There have been a number of other North Seattle apartment sales comparable to that of Willows Court. One of these recent transactions is the sale of the Solara apartment complex in Lake City located at 12736 Lake City Way Northeast. The 238-unit complex was sold for $84 million, or just over $352,000 per unit, to Newport Beach, Calif.-based MIG Real Estate, and the seller was another Newport Beach company, Sares Regis. If Willows Court achieved a similar pricing, it may be able to fetch pricing in the mid $30 million price range, excluding the development site across the alleyway.
Willows Court was constructed in 1987. The property has a mixture of one-bed/one-bath and two-bedroom/two-bath units, and the rents range from $1,750 to $2,400 per month. The property has currently only two vacancies putting the complex at 98 percent occupied. The asset has a total of 88 parking spaces with 71 covered and 17 open. The covered spaces cost $120 per month and are 85 percent occupied, and the open surface spaces have a monthly fee of $75 per month also with 85 percent occupancy.
The plan is that the development site for Amalfi Development should be fully entitled next year during the first quarter. The parcel could be developed into a project totaling130 units. Construction could begin by the new owner as early as next year.