In explaining the low cap rate, listing broker Jeff Williams, a partner in the Pacific Northwest office of Chicago-based Moran & Co tells GlobeSt.com that his analysis of the asset found that the rents were low compared to where he thought it could get to. "We told [the management company] 'you're at $2.15 (per sf per month) and we think you can get to $2.30' and as they moved rents up they started getting support for the higher price, and investors saw that," he says. "We had very deep bidding."
Here's why they had deep bidding: According to O'Conner & Associates apartment vacancy in the City of Seattle is approximately 2.2%. Rent growth over the past year was 11.2%. The analysis looked at more than 16,000 apartment units in the city.
The Sidney is located in Seattle's Belltown neighborhood within walking distance of the waterfront, entertainment venues and blocks from Seattle's Central Business District, which is Puget Sound's largest job center and home to more than 250,000 jobs. Williams noted that the Puget Sound Economic Forecaster projects regional job growth of 54,100 jobs over the next two years.
Apartments feature 9-foot ceilings; open floor plans; full-size, stackable washers and dryers; step-out balconies; and bay windows. Other interior features include walk-in closets, kitchen pantries and in select units, electric fireplaces. The community features a clubroom with lounge and kitchen; an indoor spa; 24-hour fitness center; and two landscaped, finished courtyards. A parking structure includes 146 parking spaces, a car wash area, recycling center and bicycle storage.
The new owners of the Sydney apartments are Ken and Roberta Williams, the retired game programmers who founded On-Line Systems, which later became Sierra Online. The seller was Wallfour Realty Company Inc.
"The buyer is a long-term owner who wanted a high-quality building to as to his investment portfolio that wouldn't require a tremendous amount of hands-on work," Williams says. "The property manager going forward is Precision Management."
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