Seattle Multifamily Maintains 95%+ Occupancy
Properties such as The James have recorded near double digit year-over-year rent growth due to the large disparity between rents in downtown and suburbs as renters desire higher-quality units near jobs.
LAKEWOOD, WA—The astronomical multifamily demand in the Puget Sound is reflective of, in part, a high number of new jobs and as a result, annual absorption of multifamily units has doubled. Furthermore, the increased rental demand also can be contributed to a number of regional obstacles preventing ownership in several neighborhoods. The congestion on Interstate 5, the centralized regional employment hub and the low supply of single-family homes has created a platform for elevated demand for rental units, according to JLL research.
As a result, new development continues to surge, with a significant number of multifamily units scheduled to deliver during the next four years. Despite the record number of unit deliveries, the strong absorption rate indicates a healthy investing market with ample opportunity for further expansion, according to Axiometrics.
Within that healthy investing market, one suburban multifamily property recently sold. The James, a 144-unit garden-style apartment community, sold to Watt Companies for $18.05 million. The seller was FPA Multifamily LLC.
The James is located at 4828 123rd St. SW near several of Pierce County’s largest employment drivers, including the adjacent Joint Base Lewis-McChord. Additionally, the property provides access to various commuting options such as Interstate 5 and the Sound Transit Lakewood station.
The 14-building property consists of studio, one-, two- and three-bedroom units averaging 731 square feet. Originally constructed in 1976, The James has recently undergone significant common area improvements, including siding replacement, the addition of balcony enclosures, updated landscaping, new signage, a resurfaced parking lot, clubhouse and fitness center remodel, and renovations/upgrades to approximately 50% of the units.
The Holliday Fenoglio Fowler LP team represented the seller and procured the buyer. The HFF investment advisory team representing the seller included senior managing director Ira Virden and director Christopher Ross.
“Despite ranking sixth nationally for new deliveries in 2016 and 2017, the Seattle MSA has maintained 95%-plus occupancy, which has largely been bolstered by suburban markets,” Ross tells GlobeSt.com. “Properties such as The James have experienced near double digit year-over-year rent growth due to the large disparity between rents in downtown Seattle and suburbs such as Lakewood. Additionally, we’ve seen a tremendous amount of demand for renovated suburban product similar to The James as renters desire higher-quality units nearby major metro employment drivers.”