Seattle, WA (April 24, 2018) – While the trend seems to favor redevelopment over reinvestment, not every building in Seattle’s rezoned University District is a tear down. For example, the Pacific Apartments, a 34-unit apartment building located at 5219 University Way NE, recently traded for $6.85 million, or $477 per square foot, as a valuable existing property. The new owner plans to renovate units and cure deferred maintenance rather than scrap it and build anew. Colliers International’s Tim McKay, Dan Chhan and Sam Wayne represented the buyer, UW Pacific LLC, in the transaction.
The reinvestment business model is something of an anomaly in the U-District, where the up-zone has encouraged many investors to choose denser, taller new construction over renovation of existing buildings. According to Mr. McKay, “Properties across the U-District are highly stable investments due primarily to the ongoing demand for housing from the student population. UW Pacific LLC saw the value of acquiring 34 units in this submarket, with considerable upside, and acted quickly to bring the asset into its portfolio.” UW Pacific LLC focuses on owning and managing low-rise properties in Seattle.
Many U-District owners have found their building values significantly increased based on land value, while others maintain higher valuations based on traditional income approach. McKay, Chhan and Wayne have helped numerous clients navigate the changing landscape in the U District, completing 11 apartment sale and land transactions valued at over $52 million in the area over the past five years. The team recently they listed an eight-parcel assemblage dubbed Campus Station and positioned as the largest fee-simple development site available in the U District.
Berkshire Hathaway HomeServices represented the seller in the transaction.
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