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SoCal Investor Buys Federal Way Apartments

FEDERAL WAY, WA-A joint venture that includes Crown Pacific Properties of San Diego pays $24.25 million for 335 units in two adjacent apartment complexes here that were built in the 1980s.

By Brian K. Miller | Updated on April 06, 2005

FEDERAL WAY, WA-Colony and Mirror Woods, two adjacent apartment properties here changed hands this week for $24.25 million or $72,388 sf for each of the 335 units in the transaction. Commercial Ventures Inc. of Brentwood, CA sold the properties to a joint venture of Crown Pacific Properties of San Diego and AEW Partners IV LP, a real estate opportunity fund managed by AEW Capital Management LP. Built in the early to mid 1980s, the Colony and Mirror Woods apartment communities are located off South 320th Street at 31700 and 31912 3rd Pl. SW. Colony has 180 units and Mirror Woods has 155 units. Occupancy at the two properties is just under 90%, which is below the market average of about 95%. Face rents at the property are about $0.85 per sf per month, which is below the market average of $0.90-$0.97 per sf per month. The cap rate on the investment is about 5.25% based on in-place numbers.Kenny Dudunakis of Hendricks & Partners in Seattle brokered the transaction. He tells GlobeSt.com that Crown Pacific is making its first purchase in the region and Commercial Ventures, which had 19 properties in the region at one point, sold a few last year and is now selling several more. In addition to Colony and Mirror Woods, Commercial Ventures has another four or five properties under contract to be sold in the next several weeks, says Dudunakis.Crown Pacific principal Ed Easley tells GobeSt.com his objective is to build up a portfolio of three or four larger properties like it did recently in Phoenix. The goal is to accumulate “plus or minus 1,500 units” in the market, says Easley. “We hope to close on another couple of properties this year,” he adds. As for Colony and Mirror Woods, Easley says he likes the properties because they sit adjacent to the master-planned West Campus area of Federal Way as well as 320th Street, which is home to all the significant retail in the submarket.

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