Accelerated Hiring to Boost Apartment Demand

MILTON, WA—Metro-wide, 53,700 jobs are forecasted, raising headcounts by 2.6% at year-end. Accelerated hiring will boost apartment demand, though leasing activity will trail inventory growth to lower apartment occupancy 40 basis points to 95% by next month, according to a report by Berkadia.

Operators will respond by slowing rent growth. At $1,780 per month in December, effective rent will be 2.8% higher year-over-year. The metro-wide trend will be reflected in the Downtown/Capitol Hill/Queen Anne area, where occupancy is expected to lower to 95.3% as rent advances 3%.

These positive fundamentals have resulted in a second multifamily purchase in a month. Canadian-based real estate trust RISE Properties Trust purchased the Copper Creek Apartments for $35.4 million. The transaction is also RISE’s 15th local acquisition, bringing the company’s acquired unit count in Seattle and the surrounding area to more than 2,000.

Located at 102 5th Ave., the 181-unit Copper Creek Apartments community features an average unit size of 932 square feet and includes a mix of one-, two- and three-bedroom units. Located in a low-density setting, the property also includes a rare long entryway.

“We’re thrilled about our latest acquisition of this community, which was the result of favorable pricing, strong local multifamily fundamentals and our positive outlook for the South Sound and regional economies,” said Beau Madsen, investment manager at RISE. “In addition, given that it was constructed in 2000, we are excited to execute on physical upgrades to the property to keep pace with changing renter preferences. This will help ensure the longevity of the community.”

Copper Creek, located just south of Wild Waves Theme and Water Park, is approximately a 10 minute-drive from the Port of Tacoma and 20 minutes from the Kent Valley, two areas with strong employment prospects. The property is also less than 3 miles from downtown Edgewood, which includes a Safeway and a variety of other retailers. A majority of the community is bordered by dense forest and wetlands, along with Hylebos Creek, which creates a nature-like setting for its residents.

The Copper Creek Apartments property will be managed by Thrive Communities, a Seattle-based property management firm with approximately 10,000 apartments under management.

“At the Copper Creek Apartments, RISE Properties Trust will be executing on general capital projects like adding a package locker, revamping the amenities, creating a model unit and sprucing up old systems,” Madsen tells GlobeSt.com. “They will also evaluate the feasibility of an interior unit upgrade program in a few months. The seller has owned the asset since 2003, so they are excited to have fresh eyes on the operations.”

In addition to Copper Creek, RISE owns 12 multifamily properties throughout Seattle and the surrounding area—including Alaire (Renton), Modera (Seattle), West Ridge Park Apartments (West Seattle), Artesia by the Lake (Everett), Bentley House (Issaquah), Rainier Pointe (Fife), Borgata Apartments and Townhomes (Renton), Citywalk Apartments (Seattle), Northline Apartments (Seattle), Starboard Apartments (Kirkland), Station 9 Apartments (Lynnwood) and Woodcreek Apartments (Lynnwood).

With elevated apartment occupancy in recent years in the Seattle-Tacoma metropolitan area, multifamily developers expanded the construction pipeline, leading to an influx of new inventory this year. Construction is scheduled to complete on 13,075 units by year-end, the highest annual deliveries in more than 15 years, according to Berkadia. Additions again will be focused around the major employment hubs with more than half of new inventory becoming available in the Downtown/Capitol Hill/Queen Anne submarket. Boosting demand in the area will be the opening of the first phases of the new Google Cloud buildings encompassing four six-story buildings. The project is expected to finish in early 2019.