164-Unit Apartment Community in Lacey, Washington Sells for $19,300,000
Seattle, Wash. (April 4, 2018) – Shelter Resources, Inc., a local developer and renovator of affordable housing, has acquired College Glen Apartments, a 164-unit apartment complex located at 4870 55th Lane SE in Lacey, Washington, for $19,300,000. The seller was College Glen Apartments, LP. Kidder Mathews’ multifamily brokers, Sid Warsinske, Giovanni Napoli, Philip Assouad, and Ryan Dinius brokered the transaction.
College Glen was built in 1996 and is located in the heart of Lacey, Washington. This well maintained, low density, garden style community has multiple amenities including a playground, community center, and indoor sports court. College Glen is a low-income housing tax credit property, and Shelter Resources will continue to operate the community as such.
Shelter Resources, and their equity partner, Enterprise Community Investment, Inc., assumed the existing HUD loan on the property, supplemented with a new subordinate cash flow loan from Enterprise Community Loan Fund, a national Community Development Financial Institution (CDFI), and they are planning a re-syndication of the tax credits. Shelter Resources will conduct renovations to the interior and exterior to enhance the community for its residents.
Secondary and tertiary locations continue to experience accelerated rent growth, and as a result, investors are increasingly moving their capital to markets, such as Lacey, that have more attractive returns coupled with good economic drivers. In Lacey, landlords experienced close to 8% rental growth last year. From 2016 to 2017, multifamily sales volume doubled in Olympia and Lacey compared to the Tri-Counties where sales volume actually declined. In addition, area median incomes continue to outpace inflationary growth, which makes the tax credit aspect of the community very attractive.
“We’ve seen continued investor interest acquiring multifamily assets in the South-end over the last few years, but particularly in Pierce and Thurston Counties over the past 24 months as rent growth on a percentage basis is amongst the highest in the region,” said Napoli.
“Not only are local investors, such as Shelter, pursuing tertiary locations, but some of the larger sponsors and syndicators across the Western United States are targeting areas such as Lacey and Bellingham,” said Warsinske. “Historically these have been markets largely dominated by local players, but as cap rates have compressed in the core markets such as King and Snohomish counties, these investors are choosing to seek yield in these locations and play off the phenomenal employment and rent growth in Western Washington,” he said.
About Kidder Mathews
Kidder Mathews is the largest independently owned commercial real estate firm on the West Coast, with over 700 real estate professionals and staff in 21 offices in Washington, Oregon, California, Nevada, and Arizona. Kidder Mathews offers a complete range of brokerage, appraisal, property management, consulting, project & construction management, and debt & equity finance services for all property types. The firm performs $7 billion in transactions, manages over 50 million square feet of space, and conducts over 1,500 appraisals annually. For more information, visit kiddermathews.com.