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'Flight to Quality' for Apartment Investors

SEATTLE, WA-Three brokers at Paragon Real Estate Advisors say investors are worried about economic impacts--like Boeing layoffs--on outlying submarkets. At times like these they say investment money turns to historically stable and well-occupied neighborhoods like close-in Capitol Hill.

By Janet Parker | Updated on February 27, 2002

SEATTLE, WA-”Since September 11 there’s been a ‘flight to quality’ in the apartment market,” says Eric Smith with Paragon Real Estate Advisors. Driven by the fears of recession, he says investors are turning to neighborhoods like Capitol Hill as a place to park their money. “Capitol Hill is one of those quality markets,” professes Smith, “It’s always been a safe place to invest.”

Smith is one of the Paragon brokers to have collectively closed nearly $10 million in Capitol Hill properties since the first of the year. Compared to the previous two years, Smith notes that 2002 deal velocity, as well as prices, is relatively the same.

On one property, however, the story was quite different. Paragon’s Chris McCarty represented the buyers on a 59-unit property at 535 13th Ave. E. “The seller (from Hawaii) had owned the building for about ten years and wanted to realize his gain and move into an industrial 1031 exchange,” begins McCarty. “Back in July there were 11 offers on the building, many of which were above list, and our client put down non-refundable earnest money to get the sale.”

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