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CalSTRS Buys 311-Unit Multifamily Complex

EVERETT, WA-With its advisor Waterton Associates, the California State Teachers Retirement System purchases the Crystal Cove Apartments here for $22.7 million.

By Brian K. Miller | Updated on November 11, 2004

EVERETT, WA-The 311-unit Crystal Cove Apartments complex here has been purchased by the California State Teachers Retirement System in partnership with Chicago-based advisor Waterton Associates. The pair paid $22.7 million in cash for the 14.5-acre development built in 1990, with CalSTRS putting up 90% of the price and Waterton contributing the remainder. The seller was Foster City, CA-based Legacy Partners.Located at 12102 Fourth Ave. W., Crystal Cove is a 25-building development situated seven miles from the 1.4 million-sf Alderwood Mall and between the region’s two major north-south routes, Interstate 5 and Highway 99. Common amenities include indoor and outdoor pools, an indoor spa, and a fitness center. The property also has two “tot lots,” two sport courts and a clubhouse with an activity center. All units have washers and dryers, deck or patio, private storage closets, and wood burning fireplaces. Crystal Cove was 91.9% leased as of the end of September. According to the CalSTRS Investment Committee’s November real estate status report, the property’s estimated leveraged IRR is about 15.7%, and the estimated unleveraged IRR is 9.5%.The purchase is part of a larger relationship between CalSTRS and Waterton that began in 2002. CalSTRS is in the process of investing $210 million through Waterton. To date, CalSTRS has allocated $81.5 million. Information was not immediately available on whether the CalSTRS-Waterton partnership has acquired other Puget Sound-area properties. Whether with CalSTRS or somebody else, Waterton entered the Puget Sound market in 2002 by purchasing two apartment complexes. The firm bought the 260-unit Mission Ridge Apartments in Renton for about $15.6 million and the 221-unit Turnberry Apartments in Everett for about $13.3 million. The buildings were part of a portfolio purchase that included two properties in Florida properties.

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