By Jon Peterson
Los Angeles-based TruAmerica Multifamily has acquired four apartment properties in the Seattle area for $121.45 million or $151,000 per unit. This comes on the heels of a $36 million acquisition the firm announced just days ago of 202-unit Windsor Apartment Homes in Renton.
The properties in the portfolio are the 188-unit Madison Alderwood Park in Lynwood, the 153-unit Madison Ridgegate in Kent, the 221-unit Madison Ridgetop in Silverdale and the 240-unit Madison The Wellington in Silverdale.
“We believe that these properties are located in good markets with real strong job and population growth that should lead to strong demand for apartments in the future. Because these properties are not located close to downtown Seattle or South Lake Union, I don’t see them being impacted by all of the new units being added in those locations,” says Noah Hockman, senior managing director of acquisitions and investor relations.
The overall occupancy of the portfolio acquired in Seattle is 95 percent. The properties were constructed in the late 1980s.
The properties in Seattle were part of a seven-property portfolio deal that was acquired for $255 million. The other three assets were two properties in Portland and one in Salt Lake City.
The seller of the complexes was Philadelphia-based Equus Capital Partners. “We had to make a decision as to what we wanted to do with the portfolio as each of the seven properties had a loan coming due in the next few months. We could have re-financed the portfolio or sell the assets. We chose to sell the properties as we felt there would be very strong demand for apartments in the markets these assets are located in,” says Greg Curci, a vice president with Equus. Another factor in the sale was that these assets were owned for Equus Fund VIII and the investors in the fund were hoping to get some strong distributions from the sale, according to Curci.
The sale of the assets in Seattle and Portland are all of the assets that Equus owns in the Pacific Northwest. The company is certainly looking to re-enter those markets in the future. “We believe that the Pacific Northwest is a very strong apartment market and we would definitely like to find assets to buy in those markets again. We do realize this won’t be easy with so much investor demand in the region right now,” said Curci.
The sale of the portfolio to TruAmerica was brokered by the Seattle office of CBRE. This real estate services company represented both the buyer and the seller. The two brokers involved in the sale were John Hallgrimson, executive vice president, and Eli Hanacek, a senior vice president.
Equus is a real estate manager that buys and sells properties for institutional investors. These would include pension funds, family offices and endowments. The company has a new investment fund out called Equus Fund X. The total capital raise is projected to be in the range of $300 million to $400 million. The overall leverage component on the fund is anticipated to be 65 percent.
Fund X has a value-add investment strategy. It will be investing in a mixture of apartments, office, industrial and retail.