Fairfield Makes Bottom-of-Market Bet

REDMOND, WA-Fairfield Residential is betting that the Seattle area’s Eastside multifamily market has hit bottom. The San Diego-based firm has paid $42 million or $105,000 per door for the 400-unit Ravenswood at the Park apartment complex in Redmond, the biggest single multifamily transaction since 1999, according to Hendricks & Partners, the real estate advisory that brokered the transaction.

The seller was Amstar Group Ltd. of Denver, a privately held real estate investment firm that acquired the property in 1998 for $39 million. The property was the only Seattle-area asset for Amstar, which sold three others last year including the 518-unit Stonehaven at West Campus in Federal Way that was bought by United Dominion Realty Trust Inc. for $35.8 million. For Fairfield, the acquisition gives it 11 properties in the greater Puget Sound region.

David Young, the H&P broker who negotiated the transaction, tells GlobeSt.com that the sale bodes well for the Eastside market, which was commanding per unit prices of $125,000 per door before the economy turned two years ago. “We’ve been in the tank, hit bottom and it takes some of these aggressive buyers looking to take advantage in order to reinvigorate the market,” says Young. “They paid in the 6% cap range, betting that going forward Microsoft will start booming and Boeing will find its footing and that the cap rate will gain at least 100 basis points in the next 18- to 24 months.”