Sack Bags Third WA State Property in 18 Months

WOODINVILLE, WA—For the past 18 months, Sack Properties’ Washington State properties included Summit Redmond in Redmond and The Mill in Mill Creek. That is, until Sack recently acquired multifamily property, Chateau Woods.

“Over the past 18 months, we have strategically acquired three assets in the Eastside submarket of Seattle,” David Feinberg, CIO of Sack Properties, tells GlobeSt.com. “Our team has developed excellent relationships across the West Coast and through those, we were able to close on this third high-profile property regardless of the challenges COVID-19 has presented.”

Chateau Woods is adjacent to the region’s technology hubs of Bellevue, Redmond, Kirkland and Seattle. Nearby employers include Amazon, Microsoft, Google and Facebook, all of which are expanding Eastside footprints. Most recently, Amazon announced its intention to build HQ3 in Bellevue which would put an additional 22,000 employees at that location during the next five years.

Chateau Woods is an ideal fit for Sack’s long-term portfolio of suburban multifamily properties, says Kirby Sack, CEO of Sack Properties.

“We were drawn to the Chateau Woods asset because it is newer construction at just over 10 years and in a prime West Coast suburban location that is in a path of growth,” Sack tells GlobeSt.com.  “It is a bullseye for Sack’s long-term hold portfolio.”

Built in 2008, Chateau Woods is an Energy Star-certified condo-quality asset. The property mix includes 59 one-bedroom units and 55 two-bedroom units. The average unit size is 978 square feet and 36% of the units include a den. The elevator-served community also has a resident clubhouse, a 24-hour fitness center, bike storage, and outdoor courtyards with dining and barbecue areas.

“Our investment mandate focuses on owning and operating in high-quality Western United States submarkets,” says Sack. “Typically our assets are of older vintage, but here we were able to uncover opportunity in a 2008 asset. Chateau Woods’ winning formula is the combination of excellent location, newer product and growth opportunity.”

Sack Properties was represented by the Pacific Northwest Institutional Property Advisors team of Giovanni Napoli, Philip Assouad, Ryan Dinius and Sidney Warsinske. Financing was led by JLL Capital Markets senior managing director Charles Halladay, senior managing director Peter Smyslowski, managing director Chris Gandy and analyst Matt Cimino.

“Through the relationships we have cultivated over decades, we were able to identify and close on this rare asset in a time in which transaction volume is challenged due to the pandemic,” adds Feinberg. “We are believers in the growth story. I’m proud of what our team was able to accomplish, given the complexity of this transaction and the current environment.”

Sack Properties is a 62-year-old San Francisco-based real estate investment and management firm with a $750 million portfolio of approximately 2,500 multifamily units throughout the Western United States.

Indeed, multifamily transaction volume in Puget Sound, though stymied, remains resilient during the COVID uncertainty, according to Colliers International. In King County, where 70% of the regional apartment stock is located, rent collections fell to 76.4% in September 2020 according to the NMHC Rent Payment Tracker, compared to 81.2% in September 2019. However, this drop is within the historical range of healthy collection data. As a result, concessions are on the rise.

Occupancy and rents contracted in King County by 1.2% and 2.6%, respectively, while Pierce and Snohomish counties both had substantial bumps in rents of 4.6% and 2.5%, respectively. The flight to suburban locations continues to be the trend, as investors and developers look to capitalize on growing tenant demand. On the development side, 1,601 new units were delivered, while units under construction increased by 2.2% to 18,249 units across the region.