Limited Liability Firm Sheds 59-Unit Apartment

(Save the date: RealShare Apartments comes to the Westin Bonaventure, Los Angeles, October 24.)

SEATTLE-GlobeSt.com has exclusively learned that at 700 Broadway Ave. East in Seattle has changed hands. The 59-unit apartment community was sold for $20.25 million or $343,220 per unit.

The seller was Broadway's End Associates LLC, a limited liability company of Seattle. The buyer was SP/RPA Broadway LLC of Seattle.

The unit mix consists of 17 studio apartments, 37 one-bedroom/one-bath units, and five two-bedroom/two-bath units. The 700 Broadway property is a mixed-use asset with four retail spaces. Two spaces are occupied by national credit tenants FedEx Office and Roy Street Coffee & Tea, a Starbucks concept.

The transaction was negotiated by Kyle Hunt of the Seattle office of Hendricks & Partners on behalf of the seller. Hunt tells GlobeSt.com that the buyer acquired the development with an institutional partner.

The mixed-use property has 10,675 square feet of retail. The apartment occupancy rate is 100%. Hunt tells GlobeSt.com that “Security Properties was attracted by the building’s great location and their belief that the development’s asking rents were below nearby competitive properties, especially given their plans to do some building upgrades.” He adds that this is Security Properties second local acquisition in the past two months and “they anticipate holding the asset for several years.”

According to Hunt, the sellers were a local investment group that developed the property. “The owners were motivated to sell the asset due to the accelerating supply growth anticipated in Seattle over the next several quarters.” Up until this year, he says, apartment completions had been modest in the metro.

“Occupancy is at very high levels and rents have increased significantly from a few years ago,” he tells GlobeSt.com. “Seattle, however, is expecting several new projects to begin leasing in the near future, and the owners thought that it was the right time in this cycle to sell.”

The property is at north end of Broadway on Capitol Hill and is about a mile from South Lake Union and Amazon.com’s headquarters, Hunt explains.

Seattle-area apartment vacancy measured 4.2% in the first quarter of 2012, down 110 basis points from the 5.3% rate in the first quarter of 2011, according to Hendricks & Partners. Additionally, average rent increased 2.8% over the past year to $1,024 per month. The firm points out that improved fundamentals are due to rising payrolls, as headcounts have increased by 40,500 workers, or 2.5%, in the 12 months ending in March of 2012.