Overlook at Lakemont Sells for Third Time in Four Years

BELLEVUE, WA-The multifamily REIT Archstone-Smith earlier this month sold the 400-unit Overlook at Lakemont complex here to Chicago-based fund manager Heitman for close to $64 million, or about 28% more than it paid for the asset in 2004. Surrounded by million-dollar homes, the low-density property has changed hands three times in the past three-and-a-half years.

The Overlook at Lakemont was built in 1992 on 27.5 acres at 5305 Lakemont Blvd. SE, off Interstate 90 on Cougar Mountain. The buildings are surrounded by mature evergreen trees and private homes valued at $500,000 to $4 million. Occupancy is currently about 95%.

In mid-2002, on behalf of the private Drever Multifamily Opportunity Portfolio Fund LLC, Maxwell Drever's Concierge Asset Management paid $38.6 million for the asset, which was in need of a facelift. The company invested an additional $4.7 million on upgrades and raised monthly rental collections by more than 25%.

In October 2004, having met his IRR goals two years earlier than expected, he sold it to Ameriton, a wholly owned subsidiary of multifamily REIT Archstone-Smith, for slightly more than $50 million, or about $7 million more than was invested in the property. At the time, Drever told GlobeSt.com he sold the asset because he didn't expect the market to improve much in two years.

Nonetheless, Hendricks & Partners David Young, who has sold the asset each time, had a feeling Archstone would do well. "Archstone got a beautiful, well-positioned, in-fill apartment community in one of King County's most affluent neighborhoods," he said in October 2004. "It can only grow in value."

And grow in value it did. In early January, having done very little to the property, Archstone-Smith flipped it to Heitman for $63.75 million, or about $13 million more than it paid just 15 months earlier.