Entry Level, Affordable Housing is Rare Commodity

KIRKLAND, WA—Fannie Mae reports there are more than 40,000 households in Seattle paying in excess of 50% of income on rent. As entry-level housing remains a need for would-be owners and lack of affordability continues to be a factor in the Seattle metro, condo conversions offer one option. To that end, Magma Equities recently completed a multimillion-dollar condominium conversion of a 52-residence community, the Slater.

“The project was originally designed as a condominium development. While not simple, it made the conversion process a simpler one, and allowed us to market the units at price points more affordable to the first-time buyer,” Ryan Hall, managing principal of El Segundo, CA-based Magma Equities, tells GlobeSt.com. “While we will continue to seek out, acquire and improve older multifamily assets for rent, we see this as a launching point for similar conversions where we can offer entry-level for-sale units as another option for renters being priced out of Seattle and other select West Coast markets.”

The residence mix also includes five homes permanently designated as affordable housing for residents earning less than 80% of the area’s median income. Prices for the affordable homes begin at $185,000. The median income in King County is $103,000, according to the Department of Housing and Urban Development.

“Housing costs continue to consume a large percentage of wage earners’ income, especially in Seattle, which is one of the most expensive housing markets in the United States,” said Hall. “With average asking rental rates approximately $2,100 per month, condo ownership at this price point can be a realistic and a more practical option for many renters. Interest rates are still at historic lows and mortgage payments can be several hundred dollars a month less than rents for a comparable apartment. More importantly, housing costs will remain constant.”

The Slater offers a market rate mix of studio, one- and two-bedroom floorplans with prices starting from $395,000. Each home, ranging in size from approximately 541 to 1,120 square feet, features stainless steel appliances, glass-top stoves, full-sized washers and dryers, walk-in closets, and floor-to-ceiling windows.

There are currently 6,187 multifamily rental units under construction with an additional 9,433 in the pipeline in the Seattle metro, all of which are class-A product, according to a report by Polaris Pacific which represents the sales and marketing for the property on behalf of Magma Equities.

“While new construction is trying to keep up with demand, the fact is the new inventory is priced well out of the reach of most renters in the region, which is doing nothing to solve the housing affordability problem,” added Josh Nasvik, Polaris Pacific VP/regional manager in the firm’s Seattle office. “As a result, we are seeing an increase in condominium sales, especially in Kirkland, where sales have substantially outpaced all the other Seattle submarkets in the past three months.”

Magma Equities and Polaris Pacific have entered into a strategic partnership with San Francisco-based home and lifestyle retailer Batch, for the design and curation of two model homes at the Slater, with the full assortment of furnishings available for purchase.

“We are thrilled to be a part of the Slater’s unique offering in the Seattle market,” said Lindsay Meyer, CEO and co-founder of Batch. “We believe this highly customized and shoppable approach to home staging not only helps to differentiate the Slater, but also meets the needs of a new generation of homebuyers who want easy access to beautiful furnishings and décor at an affordable price.”

Magma Equities acquired the property at 11415 Slater Ave. NE in October 2018. Originally built in 2010, the five-story building has a fitness center, secured lobby, underground parking, club room, and courtyard with barbecue and lounge seating. The building opens for sale on March 23, 2019.