(To read more on the multifamily market, click here.)
SEATTLE-The 645-unit Shorewood Heights Apartments on Mercer Island here has changed hands for $141.25 million, which equates to $218,992 per unit or $259 per sf. A joint venture of locally based Security Properties Inc. and Principal Global Financial of Iowa acquired the property from HAL Real Estate Investments. The sale closed Wednesday.
Dana Behar, who heads up HAL Real Estate, tells GlobeSt.com the 45-acre, 40-building property at the north end of the island could in theory hold twice as many units, but says the general consensus among prospective buyers was that an additional 200 units could be added "comfortably."
Originally built in 1949 by Charles Clise, HAL Real Estate acquired the Shorewood Heights Apartments in 1998 for $54.75 million, according to public records. Behar says HAL then invested an additional $23 million in a "massive" renovation that also included the addition of 78 new condo-quality units and an activity building with business center, lounge, chef's display kitchen and 24-hour fitness center.
The property generated 25 offers. The offer from the Security Properties-Principal Global JV was the most competitive "on a whole range of fronts," says Behar. The sale closed in about 60 days, he says.
Frank Bosl and Jon Hallgrimson of CB Richard Ellis' Seattle office served as consultants on the disposition. "When Boeing announced at the end of 2003 that it would assemble its 787s here, there was the beginning of a perceived recovery in the multifamily investment market," says Bosl. "Now we're seeing an actual recovery in the performance of properties. Vacancies and concessions are down and rents are going up. Potential buyers are looking at the future performance of properties in our region."
Security Properties and Principal Global also co-own the 128-unit Epicenter apartment property in Seattle's Fremont District that is anchored by a Puget Consumers Cooperative grocery store.
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