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284-Unit Apartment Complex Trades for $16M

RENTON, WA-An entity of Oakland, CA-based AF Evans Co. acquires the Cascade Heights Apartment complex here at a 6.5% capitalization rate from an investor group formed by Seattle-based Horizon Realty Advisors.

By Brian K. Miller | Updated on July 27, 2004

RENTON, WA-The 284-unit Cascade Heights Apartment complex here traded hands for $16 million. The new owner is Highland Investors LLC, an entity of Oakland, CA-based AF Evans Co., an owner and manager of multifamily developments. The seller was Cascade Heights LLC, an investor group formed by Seattle-based Horizon Realty Advisors.Cascade Heights is located at 1150 Union Ave. NE in the Renton Highlands, within walking distance of shopping and schools. Built in 1974, the complex contains 132 one-bedroom units and 152 two-bedroom units and has seen some $600,000 in improvements since 2002. The average unit size is 724 sf and the average in-place rent is $0.87 per sf. Occupancy as of the end of March was 97%.As part of the purchase price, AF Evans assumed a $12.2-million Deutsche Bank conduit loan with a 30-year amortization and a fixed interest rate of 5.29%. The loan matures in 2008. The capitalization rate on the investment is 6.45% (after reserves).Daniel B. Boring and Peter Shelton of GVA Kidder Mathews represented the buyer in the transaction. Tim Smith of Horizon Realty Advisors represented the seller. Boring tells GlobeSt.com that the buyer’s interest in the property was boosted by the planned redevelopment of a portion of Boeing’s 280-acre Renton plant at the south end of Lake Washington.Boring adds that despite the recent uptick in interest rates, capitalization rates do not seem to be moving. “We were all thinking that a rise in interest rates would push up cap rates, but it’s not happening and this sale attests to that,” says Boring. “There’s still too much pent-up demand that has to burn off.”

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