By Meghan Hall
Investment into multifamily product continues throughout the Puget Sound, even into smaller assets. In a transaction that closed yesterday, the Lake Villa and Copper Beach apartment complexes in Lake Stevens sold for a combined $12.75 million. The seller, Lake Villa Apartments LLC, is based in Washington and affiliated with Terry Posner and Virginia Caunt, according to public documents. The buyer was CEP III – Lake Villa 20 LLC, based in Everett.
Philip Assouad, Giovanni Napoli, Ryan Dinius, and Sidney Warsinske at Institutional Property Advisors represented the seller in the deal.
Together, the two assets shave a combined 67 units, with the Lake Villa Apartments the larger of the two. The property, located at 12506 16th St. NE, was originally constructed in 1953. The property sold for about $10.2 million. According to Apartments.com, the complex is a mix of 52 two- and three-bedroom units, with rents ranging from about $1,425 per month up to $1,610 per month.
The Copper Beach Apartments are located at 2109 123rd Ave. Built in 1985, the complex includes 15 two-bedroom townhomes. The purchase price was about $2.5 million.
While Seattle and other regions such as the San Francisco Bay Area have fared okay in the wake of the pandemic, Marcus and Millichap predicts that the national multifamily sector could suffer if government support subsides in the coming months. In a recent special report, the brokerage firm notes that while government stimulus absorbed some of the initial financial shock for tenants, more government initiative may be needed to weather the storm.
Multifamily rent collections, for now, continue to exceed expectations during Q2 thanks to federal unemployment supplements and stimulus checks. However, widely, multifamily fundamentals regressed, with vacancy nationwide moving up to 4.7 percent, while limited demand and more renewals—versus lease rolls—will mitigate rent growth. During the second quarter, the average effective rent dipped 0.9 percent to $1,415 per month. Seattle’s rent decline was on par with national levels, although its rents remain comparatively elevated at $1,829 per month. If unemployment remains high, renters could face significant hurdles in paying rent, putting pressure on the property owners, investors and landlords down the line.