The low-density 56-acre community, Avana 522, was built in 1988 and expanded in 1999.
BOTHELL, WA—In one of the largest multifamily transactions in Seattle this year, Decron Properties recently acquired Avana 522, a 558-unit multifamily property, for $173 million. The transaction marks the Los Angeles-based real estate firm's entry into the Pacific Northwest real estate market after years of due diligence.
Avana's high unit count allows Decron, which owns close to 7,500 apartment units in California, to immediately enter the Seattle market with scale through a single acquisition and paves the way for additional investments in the Seattle MSA. Decron's investment strategy focuses on opportunities that are supported by long-term growth drivers, specifically job creation, supply and demand imbalance, and strong public school systems.
The discipline to focus on these three metrics has been a major contributing factor to Decron's success in California. This same focus is the motivation behind Decron's entry into the Seattle MSA. Decron plans to invest approximately $400 million in the Seattle market during the next 36 months, according to Daniel Nagel, Decron's chief financial officer.
“Seattle and its submarkets are a significant job creator market that benefits from a cluster of major employers with long-term growth prospects,” Nagel said. “In addition, our concerns about the current regulatory environment in California heightened our focus on investing outside of our home state. Avana is the result of several years of due diligence by our investment team to understand the nuances of the market.”
The low-density 56-acre community was built in 1988 and expanded in 1999. With immediate access to Highway 522 and Interstate 405, residents are within 20 miles of some of the area's largest employers, including the Microsoft headquarters in Redmond, Boeing's headquarters in Everett. Also, companies such as Google, Facebook and Amazon have offices in Kirkland, Redmond and Bellevue. The property is also located near two large business parks in Bothell, the North Creek Business Park and Canyon Park, which include tenants such as Google, AT&T, T-Mobile and Philips Medical Systems.
Offering a commute to hundreds of thousands of jobs and with one of the best school systems in the state, Bothell has become one of the top apartment submarkets in Greater Seattle, attracting both Millennials and dual-income families. Current submarket occupancy is 94.7%, projected to remain strong through the next several years, according to CoStar.
Nagel discussed how Decron went about the Avana acquisition and won the deal in a very competitive market.
“Being a new buyer in a competitive market is a challenge we did not take lightly,” Nagel tells GlobeSt.com. “I flew many times to Seattle to bid on deals, earn credibility with the brokers, and assist in their competitive process. Although unsuccessful on our previous bids, the effort proved worthwhile with Avana. We carried our biggest bat to the plate and made sure to reach out to every contact we had with the investment sales team and seller. We covered all the bases, put forth the most compelling offer and ultimately finally saw success.”
The garden-style community features a mix of one, two- and three-bedroom units. Avana includes a wide variety of amenities including two outdoor pools and one indoor pool, two clubhouses and two fitness centers, four playgrounds, indoor and outdoor basketball courts, tennis courts, picnic and barbecue areas, two pet parks and an indoor movie theater.
Decron will undertake a significant capital improvement program, including upgrading all unit interiors with upgraded stainless steel appliances, new kitchen cabinet doors and quartz countertops, and upgraded plumbing and electrical fixtures. The common community areas will also be upgraded, with the renovation of the clubhouses and pool areas, adding fire pits, new playground equipment, as well as modernizing the two dog parks. The company also plans to expand the capacity of the package locker facility.
Frank Bosl, Eli Hanecek and Jon Hallgrimson from CBRE's Seattle office represented the seller in the transaction.
Decron is one of the largest privately owned real estate firms in California with 2017 revenues of $190 million focusing on ground-up development to value-add/rehab to asset repositioning.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
