By Jack Stubbs
On June 27th—in a transaction which was recently recorded—the Homestead/Rainier Meadows Apartments in Federal Way sold for $26.5 million, or about $197,761 per unit, according to King County records. The buyer was Fast Lane Investments-Homestead LLC, an entity based in Renton, and the seller was Thayer Manca Residential (TMR), a multifamily investment company based in Seattle.
The Homestead Apartments—otherwise known as Rainier Meadows and originally acquired by TMR in 2016 for $16.921 million, according to the seller’s web site—contains 134 units. Located at 29225 Military Road S., Rainier Meadows offers newly-renovated one- and two-bedroom units that range from 691 to 932 square feet and rent for between $1,220 and $1,635, according to the web site for the property. The multifamily community also includes a playground, fitness center, swimming pool and pet park.
Rainier Meadows’ location adjacent to Interstate-5, roughly two miles north of Federal Way and thirteen miles south of Renton, makes it an appealing investment opportunity, the design for which takes cues from the natural surroundings of Federal Way and the greater Puget Sound region: “Steeped in natural beauty and shadowed by Mount Rainier, Federal Way is home to lush gardens, a scenic waterfront and aromatic fir trees. Here you will find Homestead, an inviting community of modern apartments designed to promote a comfortable lifestyle,” the web site states.
At the time of TMR’s acquisition of Rainier Meadows in 2016, the hope was to capitalize on the economic growth occurring in the Puget Sound region since 2012—and subsequently rising rents and apartment values—which has seen a geographical shift to cities further outside of core cities like Seattle, Bellevue and other Eastside cities.
“One result of the fast-rising rents was to push thousands renters out of the expensive core areas and into the suburbs, where rents were rising, but were still much more affordable,” states the description for Rainier Meadows on TMR’s web site.”TMR has taken advantage of this spillover effect by focusing on value-add apartment acquisition opportunities outside the ultra-expensive core areas.”
TMR’s Puget Sound region portfolio includes twelve multifamily properties ranging from Everett to the city of Lacey in Thurston County. Some of these include the 231-unit Citizen & Oake Apartments in Lakewood; the 198-unit Atwater Clearing Apartments in Everett; and the 54-unit Sierra on Greenwood Apartments in Seattle. According to The Registry’s reporting, TMR sold the Sierra on Greenwood Apartments in the city’s Greenwood neighborhood to Granite Peak Partners in June 2018 for $16.2 million, or approximately $300,000 per unit.
In late April 2019, the 132-unit Evergreen Apartment Homes in Federal Way—located at 35929 21st Pl. S.—sold for $33.4 million, or approximately $253,030 per unit.
Located in the south end of Federal Way, Evergreen Apartment Homes is central to regional job centers including Seattle, the Kent Valley, Tacoma, and Joint Base Lewis-McChord, as described in a statement released by Colliers International at the time of the sale. Already abundant with lifestyle amenities such as The Commons at Federal Way shopping mall and the new Performing Arts and Events Center, Federal Way is poised to continue growing, with a recent “Opportunity Zone” designation and the Link light rail arriving in 2024.
The 7.8-mile extension to the Link Light Rail network will run from Angle Lake Station in the city of SeaTac to the Federal Way Transit Center and will comprise three stations in Kent/Des Moines near Highline College, South 272nd Street and the Federal Way Transit Center.