The seller was Phoenix Life Insurance Co., which paid about $15 million for the property about 10 years ago. The buyer was Washington-based Weidner Investments, which owns about 2,000 units in the Puget Sound region.
Geza Berger and Dennis Evans of GVA Kidder Mathews represented the Weidner. Tim Campbell and Pat Nangle of Pinnacle Realty Management Co. represented Phoenix.
Weidner tells GlobeSt.com that the property attracted 20 offers and sold for $1 million over the asking price. The sale price translates to a capitalization rate in the mid-6% range, he says.
Island Park Apartments is Weidner's second purchase in as many months. GlobeSt.com reported in early September that Weidner paid $25.7 million ($95,900 per unit) for the 268-unit Portsmith Apartments in Everett, WA. Built in 2000, the high-end multifamily community was 85% occupied at the time of sale and is now 95% occupied, says Berger, who brokered the transaction.
Weidner inked tied up both properties when interest rates were 4.5% then watched as they spiked to 6% before financing could be secured. In the case of Portsmith, Weidner chose to assume the Key Bank construction loan with hope that interest rates would drop again before it comes due. For Island Park, Berger says he was able to lock in a rate of around 5.5%.
"It was disappointing to the buyer--he wouldn't pay that price today--but he's going to be fine," Berger told GlobeSt.com after the first acquisition. "If he secures an interest rate of 6% or a little lower he still has positive leverage."
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