New Standard Equities Inc., based in Encino, Calif., furthered its investment in the Greater Seattle area market with the purchase of a northwest Renton apartment complex last Tuesday. This acquisition makes for its third multifamily asset in the Puget Sound region in less than a year.
The newly acquired apartment complex, located at 4455 NE 12th Street, was purchased from San Francisco-based Fowler Property Acquisitions, LLC for $41.5 million, or $146,127 per unit, at a cap rate of 6.6 percent. The transaction was confirmed by Jim Jensen, a senior director for Berkadia Real Estate Advisors LLC, the listing and selling brokerage firm on the transaction.
More tenants are looking to Renton for a more affordable price point
“Renton is becoming a stronger market as the cores of Seattle and Bellevue get pricier and hotter, where some properties are reaching $4 and $5 per square foot,” said Jensen. “A lot of people are looking for alternatives, even though they’d love to live in Seattle close to their jobs, and Renton is not that far away. More tenants are looking to Renton for a more affordable price point.”
Built in 1974, the 284 units offer one or two bedrooms and range in size from 591 to 815 square feet, with rental rates between $1,095 to $1,425. Some available amenities include nearby trails for hiking, running and walking, private balconies, a swimming pool and spa. Jensen says the complex will be renovated by its new owner.
New Standard Equities is a real estate firm that invests in multifamily assets built between 1960 and 2009 that are located in target markets within California and the Pacific Northwest. Over the last year it has added two other Puget Sound properties, SeaGlass Village in Bremerton and Anchor Pointe in Oak Harbor, to its portfolio. According to its Web site, an excellent job outlook is driving growth in the Pacific Northwest by advances in the technology sector and the strength of area mainstays such as Nike and Boeing. It also says that new supply in Seattle is limited to the Central Business District, while the secondary suburban markets remain tight and enjoy the local demand generators of Boeing in Everett and Renton, and Microsoft in the Bellevue, Redmond and Kirkland submarkets.
According to the 2016 Seattle apartment market study, published by Colliers International’s Seattle multifamily team, for the second year in a row south King county has nearly tied the urban areas of the County, such as Seattle, West Bellevue and Kirkland, as the most active investment sales market in the region. Average cap rates experienced further compression, as they are now averaging 5.5 percent. The team expects further stability and growth in south King county throughout 2016, including sustained vibrancy in the investment sales market.
“Most of the country does not have the high-end job growth and occupancy rates that we see in this region,” added Jensen. “We’re running on all four cylinders, it’s amazing what is going on. Even if there is a national recession in the next year or two, I think we will be able to withstand it a lot better than most other markets in the country.”