(Read more on the multifamily market.)
RENTON, WA-Berkshire Property Advisors of Boston has purchased the Carriages at Fairwood Downs, a 400-unit, class B apartment complex here that is 95% occupied. The seller was BlackRock Inc. of New York City. The sale price was $63.3 million or $158,000 per unit.
Jon Hallgrimson of CB Richard Ellis, who with Frank Bosl had the listing assignment, tells GlobeSt.com that Berkshire plans to push percentage upward by renovating the property and then raising rents by a couple of hundred dollars per month. “It was designed as a condominium development,” he says. “It's a low-density development with great floor plans in a master planned community.”
While the specific cap rate on this transaction was not available, cap rates for class B apartment product in the region has been in the low- to mid-5% range. Although deal flow has slowed, cap rates haven't risen much in the Puget Sound because apartment fundamentals are still strong, with 10% rent growth in 2006 and 11% growth so far this year, Hallgrimson says.
“Buyers are trying to push back but it's a lot more difficult when you have a strong market,” he says. “Anything that is B or C class that's heavily leveraged with conduit financing, those deals are dead and haven't come back, but there's still a lot of money that wants to go to Seattle because of the strong rent growth.”
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