Snohomish County M-F Property Trades Hands for $50M

By Alex Girda, Associate Editor

As the Seattle-area residential market heats up, there should be no surprise that investors are targeting any multifamily properties they can find. Security Properties recently closed a deal making it the new owner of a Mukilteo apartment property. The company paid $49.6 million to seller Pacific Urban Residential.

According to the Puget Sound Business Journal,  the acquisition nearly doubles the number of residential units that Security owns in Snohomish County. The company specializes in the development and acquisition of multifamily properties near the Puget Sound.

Located at 12303 Harbour Pointe Blvd., On the Green at Harbout Pointe gets its name from its position, directly adjacent to a golf course. The property offers up a number of 294 units, bringing Security’s total close to 600 residential units in three properties in Snohomish.

The property was acquired through a partnership with an unnamed institutional investor, while financing was obtained via a 10-year Freddie Mac loan at around 3.6 percent. According to Security Properties’ CEO, Tim Overland, the anticipated rate of return for On the Green at Harbour Pointe is approximately 5.5 percent.

PSBJ noted that the appeal of Snohomish County comes from the fact that the area has seen fewer units developed than the nearby King County. This means that properties in the area should have more opportunity for rental rate and occupancy growth.

Image courtesy of facebook.com/onthegreenhpb

Price of Seattle waterfront building shoots up 374% in less than 3 years

Equity Residential made a huge profit on an old Seattle waterfront building, selling it this week for $32.5 million.

Iconic Seattle M-F Property Trades Hands for $94M

By Alex Girda, Associate Editor

Seattle’s multifamily market has recently taken a backseat to the impressive milestones of the Amazon-driven office market. But in the past few weeks, the residential market seems to have picked up its pace and is now also breaking all sorts of records. The trade of the Archstone Belltown building became one of the largest residential transactions in recent memory after Mill Creek Residential Trust L.L.C. acquired the building for $94 million from seller Equity Residential.

Archstone Belltown is a 360-unit multifamily complex that was formerly known as Grosvenor House. Built in the 1940s, the structure has quite the legacy, being one of only three high-rise concrete structures built in that period in the Seattle area. The property was operated as a retirement community until the early 2000s.

Set to undergo a number of upgrades to its interior and common areas, the building has views of the Space Needle, the Olympic Mountains and the city’s core. Improvements will be made to the community’s existing rooftop garden, while a new state-of-the-art fitness center will be installed at street level. The new owner’s intention is to reposition the building to target a hipper, more modern potential resident.

Equity Residential was represented in the acquisition by a team of CBRE Group Inc. brokers: Jon Hallgrimson, Frank Bosl and Eli Hanacek. The property’s location was also a major selling point, with proximity to the new Amazon campus and The Gates Foundation ensuring existing interest from tech-oriented young professionals.   

Photo courtesy of author: Joe Mabel, via Wikimedia Commons

Apartment Building Trade in Upscale Queen Anne Breaks Record

By Alex Girda, Associate Editor

The sale of a small apartment building in the Seattle’s upscale Queen Anne neighborhood set a new high for properties with less than 100 residential units. The buyer, 17910 Burbank L.L.C., paid $14.7 million to developer Zaser & Longston Inc. for the Elliott Bayview Apartments in the midst of a growing multifamily market resulting from the city’s booming office sector.

The 41-unit residential building in Uptown Seattle traded for a per-square-foot rate of $518, the largest rate to be paid for a complex of its kind. Located at 151 John St., the property had an occupancy rate of just 50 percent, the Puget Sound Business Journal writes.

The rent rate at the building average $2.60 per square foot, but according to representatives from Marcus & Millichap quoted by PSBJ, once the leasing process picks up, the rate will go up as well, along with the buyer’s return on investment. The upscale neighborhood’s average rent rates currently stand at around $2.51, placing Elliott Bayview Apartments in the upper tier for rental properties in the Uptown area.

Buyer 17910 Burbank L.L.C. is managed by fellow California entity Mapleton Real Estate. Former owner and developer Zaser & Longston Inc. is a Kirkland-based company.

Image courtesy of elliottbayview.com.

Growing Commercial Bank Signs Two New Washington Leases

By Alex Girda, Associate Editor

The appeal of the Northwest’s growing economy was once again highlighted as emerging financial institution Opus Bank announced that it is under contract on two spaces in the state of Washington, where it will begin operations later this year. The bank has chosen new locations in Seattle and Tacoma as it strenghtens its position in the region, and with strong growth driving its current activity, it won’t be surprising if the entity goes on to sign a few more leases in the area.   

Debbie McLeod, executive vice president for retail banking with Opus Bank, termed the organization “the fastest-growing and one of the best-capitalized banks in the Western region” and noted that it is “continuing to strategically expand our network of banking offices in major metropolitan markets.”

Opus Bank’s forthcoming Seattle office will be located at 1411 Fourth St., where it will replace Tully’s Coffee Store. The branch will begin its activity there during the third quarter of this year. The Tacoma location will also be opening its doors in the year’s third quarter, at 950 Pacific Ave., Suite 150, in the Tacoma-Pierce County Chamber of Commerce building at the intersection of Pacific Avenue and 11^th Street.

Opus Bank is an FDIC-insured, California-chartered commercial bank that currently holds assets worth $2.9 billion and has $2 billion in total deposits and $2.2 billion in total loans. The banking company offers a wide range of services and is also a Small Business Administration Preferred Lender.

New Convention Hotel Project Eyed for Seattle’s Downtown

By Alex Girda, Associate Editor

Seattle’s growth has manifested itself in office and multifamily development, along with entertainment, in recent years. With a new sports arena planned and a number of franchises from the top sport associations being courted to relocate to the Emerald City, a new convention center hotel is the latest project to be unveiled.

According to the Seattle Post-Intelligencer, local development company R.C. Hedreen Co. has set its sights on constructing the largest convention hotel project north of San Francisco. The high-rise property would stand 43 stories tall on a city block located between Eighth and Ninth avenues, replacing a Greyhound bus station that is currently slated to move to a new location. The tower would offer guests a 1,500-key hotel, as well as around 150,000 square feet of meeting and ballroom space, making it the second-largest facility of its kind, trailing only the Washington State Convention Center.

With an opening tentatively set for 2017, the project would feature a six-story podium that will also contain around 40,000 square feet of retail space, the hotel’s lobby and an affordable-housing component. The project aims to fill a void of new convention and meeting space, as the developer claims that around 100 conventions backed out of Seattle due to a lack of openings. The property would cash in on that existing demand and provide a space that would also boost the area’s hospitality stats.   

Bellevue Gains Brand-New Mixed-Use Project as Area Development Picks Up

By Alex Girda, Associate Editor

Seattle’s greater metro area is reaping the benefits of the city’s improving real estate market. And with the positive influence of Microsoft, Amazon, Boeing and Google, the amount of new jobs is bound to attract professionals in need of housing. That is most likely what SRM Development is betting will happen, as the company recently announced plans to start construction on a new mixed-use project in downtown Bellevue, The Puget Sound Business Journal reports.

The project calls for 258 residential units, as well as 32,000 square feet of commercial space. But first the 2.8-acre plot of land will be subjected to a cleanup operation to rehabilitate it to a fit-for-development state. According to official information, the land suffers from soil and groundwater contamination, as well as improper care of the area due to the former presence of a dry cleaner, a gas station and an auto repair shop, according to the PSBJ. The site also housed a KFC, a Goodyear tire store and the Mustard Seed Tavern.

SRM was originally working with Denver-based Frontier Renewal on the project, but Frontier ultimately opted to sell its stake in the project. SRM is currently involved in a number of development projects in Bellevue, as well as being in charge of Google’s campus in nearby Kirkland. The company has expressed certainty that the growing number of residential units hitting the market in the immediate future is motivated, so there is no reason to fear overdevelopment.  

Capstone Plans Redmond, Portland Developments

By Alex Girda, Associate Editor

Capstone Partners is moving forward with two new development projects in the Northwest’s largest metro areas. The company acquired a 28-acre site in Redmond from Group Health Cooperative for $32.6 million, with plans to capitalize on Microsoft Corp.’s expansion in the area with a mixed-use community. It is also aiming to construct a grocery-anchored community in Portland, to the tune of about $60 million.

The Redmond site sits at 2464 152^nd Ave., N.E., and will eventually house 1,400 residential units, as well as 1.1 million square feet of commercial space including office, retail and a 300-key hospitality element. The site, formerly owned by Group Health Cooperative, had served as the Group Health Overlake Hospital campus until 2008, the Puget Sound Business Journal writes. With Capstone determined to get planning sorted out for the site, construction could begin as soon as the fourth quarter of this year or the beginning of 2014.

The Portland project is Grant Park Village. The former Albina Fuel property was set to become a 300-unit condominium development, but Capstone, which replaced the Spokane-based developer that was originally working with owner KAL L.L.C., has opted to build apartment units. The development will be anchored by a New Season Market grocery store, which will occupy 34,500 of the available 47,000 square feet of retail space. According to the Portland Business Journal, although the completed development will meet LEED standards, the developer will not pursue certification from the U.S. Green Building Council.

New Hyatt Place to Be Developed Near Angle Lake in SeaTac

By Alex Girda, Associate Editor

Locally based Ariel Development has announced plans to construct a new hospitality facility in the suburban city of SeaTac. The seasoned developer is set to build a new hotel that will operate under the Hyatt Place brand. The investment will have a total value of around $25 million, and will benefit from its placement between the more dense urban areas of Seattle and Tacoma, as well as the nearby SeaTac International Airport.

To be developed at 19518 International Blvd. in SeaTac, the hotel project will progress toward a 2016 deadline. A 150-key Hyatt Place will feature a guest amenity package including a pool, a fitness facility and around 3,000 square feet of meeting space, and will be set near Angle Lake Park, one of the city’s main attractions. The hotel’s opening will create a number of jobs, with The Puget Sound Business Journal placing the number at around 60 to 80 new positions. The project is being designed by architectural firm Linardic Design.

Ariel Development has had its fair share of experience in the area’s hospitality market, having been involved in such projects as the Silver Cloud Hotel at 1100 Broadway and the Silver Cloud Hotel – Stadium at First Avenue South, as well as the Hyatt Place at 620 Denny Way and the Courtyard by Marriott at 618 Second Ave.  

Image courtesy of arieldevelopment.com.

Iconic Seattle Office Building Changes Hands

By Alex Girda, Associate Editor

Seattle’s office market has seen a string of major transactions over the past few years, in particular as areas such as South Lake Union have defined themselves as the next big technology destinations. The investor response is so positive that even companies previously focused on residential assets are now eyeing opportunities in the office sector. A case in point is the recent acquisition of the Dexter Horton building by traditional multifamily developer Gerding Edlen.

The office building was acquired for $76.6 million from LaSalle Investment Management, according to The Puget Sound Business Journal; LaSalle had held the asset since 2006. The 1922-built Dexter Horton building features 15 floors of commercial space, each of which features between 17,000 and 24,000 leasable square feet. The building, named after the entrepreneur responsible for the city’s first bank, underwent an extensive, $34 million renovation between 2002 and 2006. At the time of the transaction, it had an occupancy rate of approximately 90 percent.

Mainly dealing with redeveloping properties into multifamily or mixed-use projects, Gerding Edlen is responsible for some of the most representative projects in Portland’s Pearl District, such as the Brewery Blocks redevelopment. The company is set to kickstart a renovation process of its own at the Dexter Horton building, with its sights set on turning the venue into a viable contender for potential creative office tenants. Gerding Edlen has yet to choose a construction company to handle the reimaging process for the building.    

Image courtesy of dexterhortonbuilding.com