By Meghan Hall
Large institutional investors aren’t the only ones interested in the Puget Sound’s growing commercial real estate market. With interest rates low, private investors are also taking the opportunity to invest in the region. In one such transaction, a Denver, Colo.-based buyer affiliated with Woodspear Ladera LLC acquired the Ladera-Heatherwood Apartments in Tukwila for $14.4 million, or about $218,181 per unit. According to public documents, the transaction closed on October 23rd but was only recently recorded.
The asset is located at 5821 South 152nd Street. According to Apartments.com, the complex was constructed in 1989 and includes 66 units. Residences are a mix of studios, one-, two- and three-bedrooms ranging from 493 square feet to 1,712 square feet. On average, the units run between $1,519 to $5,806 per month.
Common amenities include a fitness center and clubhouse, and individual units are equipped with balconies or patios, washers and dryers and ceiling fans. The property is also easily accessible via Interstates 5 and 405 and is closed to Fort Dent Park, which offers 54 acres of recreational space. The Westfield-Southcenter mall is also just one mile away.
2020 has proved to be a bit of a slower year for apartment deals—a fact that despite coronavirus is not totally surprising, according to Kidder Mathews’ Dylan Simon team in a recent report. 2019 saw a jaw-dropping $7.4 billion in sales, eclipsing previous records by more than 30 percent. With so much activity the previous year, many real estate professionals had predicted that some sort of slowdown was already on the horizon.
While the first half of 2020 saw about $506 million in sales volume, capitalization rates have held relatively stable, at 4.7 percent. While transaction volume may remain low for the remainder of 2020, Kidder Mathews predicts that things will pick up again in 2021. Low interest rates, combined with buckets of capital waiting for deployment mean that investors are waiting in the wings. Assets such as the Ladera-Heatherwood, which provide opportunity to reposition or increase NOI, will give investors the best opportunities moving forward.