Everett Multifamily Buy Gives Way to Value-Add Strategies

EVERETT, WA—A significant value-add strategy is being undertaken following the sale of Colby Creek, a 336-unit garden-style multifamily property which was purchased late last year for $80.35 million, according to Berkadia senior director Benjamin Johnson. The buyer was Canada-based RISE Properties Trust, partnering with Aegon Real Assets US.

“What truly makes the execution here unique is that the previous owners took great care of the property, creating a hopefully seamless transition during the transformation of the asset,” Johnson tells GlobeSt.com. “The interior renovation of the Colby Creek apartment homes will build upon the blueprint of what the previous owner installed, including new flooring, appliances, cabinetry, countertops, hardware and plumbing fixtures. There are also opportunities for this property to improve its common areas.”

Senior managing director Kenny Dudunakis, senior director David Sorensen and Johnson of Berkadia’s Seattle office completed the sale on behalf of the seller, California-based FSC Realty LLC. Senior managing director Ed Zimbler and associate director Ben Harris of Berkadia’s Los Angeles office also secured $58.5 million in acquisition financing via a seven-year floating rate Freddie Mac loan on behalf of Rise Properties Trust and Aegon RA.

“The garden-style community in Everett is true workforce housing based on the rents, falling squarely within Freddie Mac’s mission,” said Harris.

Located at 923 112th St. SW, Colby Creek features one-, two- and three-bedroom floor plans with in-unit washers and dryers, and private patios or balconies. Community amenities include two swimming pools, two hot tubs, a playground, a media room, a picnic area, a fitness center and covered parking. The property has access to Highway 99, Thornton A. Sullivan Park and Everett Mall.

A growing labor force with strong in-migration and sustained demand for housing strengthened the Seattle-Tacoma economy last year. After increasing 2.3% during the year prior, total nonfarm employment grew 3.3% or by 67,400 positions annually since July 2018, according to a multifamily report by Berkadia.

While additions were broad-based, 12,000 personnel were added to the education and health services workforce for a 4.3% annual increase. Boosting the sector is the presence of the University of Washington, and life sciences and biotech companies capitalizing on the university resources and graduates. Education and health services hiring was nearly matched in the professional and business services segment as the sector expanded by 11,900 positions. These positions elevated office occupancy to 94% in the third quarter.

Developers have responded as 6.5 million square feet of office space was under construction as of late 2019. These projects as well as the numerous multifamily developments contributed to 6,000 new construction jobs for 4.7% growth since July 2018, says the report.