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REDMOND, WA-Fairfield Residential is betting that the Seattle area’s Eastside multifamily market has hit bottom. The San Diego-based firm has paid $42 million or $105,000 per door for the 400-unit Ravenswood at the Park apartment complex in Redmond, the biggest single multifamily transaction since 1999, according to Hendricks & Partners, the real estate advisory that brokered the transaction.

The seller was Amstar Group Ltd. of Denver, a privately held real estate investment firm that acquired the property in 1998 for $39 million. The property was the only Seattle-area asset for Amstar, which sold three others last year including the 518-unit Stonehaven at West Campus in Federal Way that was bought by United Dominion Realty Trust Inc. for $35.8 million. For Fairfield, the acquisition gives it 11 properties in the greater Puget Sound region.

David Young, the H&P broker who negotiated the transaction, tells GlobeSt.com that the sale bodes well for the Eastside market, which was commanding per unit prices of $125,000 per door before the economy turned two years ago. “We’ve been in the tank, hit bottom and it takes some of these aggressive buyers looking to take advantage in order to reinvigorate the market,” says Young. “They paid in the 6% cap range, betting that going forward Microsoft will start booming and Boeing will find its footing and that the cap rate will gain at least 100 basis points in the next 18- to 24 months.”

Ravenswood was built in 1983 and was 93% leased at the time of the sale, says Young. “Based on the price per unit they paid, I think when people look back at this transaction from 2005 they will say Fairfield got a very good deal,” says Young.

Indeed, several economic indicators that affect the health of the apartment market are expected to show improvement over the next two years, according to The Puget Sound Economic Forecaster, published by Conway Pedersen Economics. Employment growth is expected to rise by 0.1% in 2003 and 1.5% in 2004 and population growth expected to increase the next few years to a peak of 1.5% in 2007.

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