By Jack Stubbs
An apartment property in Seattle’s ever-active Capitol Hill neighborhood changed hands last week. On Friday, May 11th, the Cove Apartments sold for $32.16 million, or approximately $536,000 per unit, according to public records filed with King County. The buyer was Bellevue Ave. Cove Holdings LLC, an entity affiliated with Connor Freeman based in Seattle. The seller was Vibrant Cities, a developer of apartment and hospitality properties in Seattle and Portland.
The seller did not respond to calls or emails for comment about the transaction in time for the publishing of this story.
Managing directors David Young and Corey Marx, and vice presidents Matt Kemper and Don Flanigan from JLL’s Capital Markets Team arranged the sale on behalf of the seller, Seattle-based Vibrant Cities. Managing director Ray Allen and senior vice president Seth Heikkila arranged long-term mortgage financing for the buyer at favorable terms from a life company.
The seven-story Cove Apartments, located at 601 E Pike St., was built in 2017 and contains 60 units, according to the property listing on apartments.com. The apartment complex offers a mix of studio, one-bedroom and two-bedroom units, according to the property’s web site. The studios range from 412 to 430 square feet and rent for between $1,694 and $1,725, while the one-bedrooms range in size from 509 to 709 square feet and rent for between $1,740 and $2,926. The two-bedroom units total 826 square feet and rent for between $3,190 and $3,290.
Some of the prominent in-unit amenities include hardwood floors, high ceilings, patio/balcony and quartz countertops. Some of the community amenities include a fitness center, on-site management and maintenance services, covered parking and a rooftop deck.
The property is located in the heart of Capitol Hill in the prominent Pike/Pine corridor. The asset is just half a mile from Seattle University and three blocks from Cal Anderson Park. Additionally, the apartment complex is approximately half a mile from access to Interstate-5 and roughly one mile from Westlake Center and Westlake Park.
Seattle-based Vibrant Cities currently owns or has investments in over 1,000 apartment units in the various stages of the development pipeline, according to the company’s web site. Having recently sold the Cove Apartments, the developer currently operates five other apartment properties throughout Seattle. Some of these include the 40-unit Alki Condominiums in West Seattle; the 70-unit Pivot Apartments in Capitol Hill; and the 95-unit Niwa Apartments in Queen Anne.
The multifamily market in Capitol Hill has been active in recent months. On March 7th 2018, Equity Residential acquired the 117-unit Chloe Apartments—located at 1408 E. Union St.—for $53.7 million, or approximately $458,974 per unit. And on February 22nd, Equity Residential announced its plans to further expand its Seattle portfolio: the company has a 137-unit apartment property in the works at 1401 E. Madison St., also adjacent to the Pike/Pine corridor. Construction on the 137-unit property is set to be complete in third quarter 2019.
And Capitol Hill is set for my activity in the coming months, according to a 2018 Knowledge Report written by Colliers International’s Seattle Apartment Team. The overall vacancy rate for Capitol Hill/Eastlake currently sits at 5.2 percent. The vacancy rate for Belltown/Downtown/South Lake Union sits at 5.7 percent, and the Central District has an overall vacancy rate of 6.4 percent. The vacancy rate for First Hill—adjacent to Capitol Hill—is 4.9 percent. According to the report, there are 530 new units in the development pipeline for 2018 in Capitol Hill/First Hill/Eastlake and another 912 units slated for development in 2019.