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MUKILTEO, WA-Pacific Property Co. has acquired a 294-unit apartment complex here for $47 million or about $160,000 per unit. The complex, known as On the Green at Harbor Pointe, fronts the Harbour Pointe Golf Club.

The seller, Legacy Partners acquired the property as a 558-unit complex in 2006 for $69 million, or $123,650 per unit, in partnership with GMAC Institutional Advisors. The duo then converted the 264-unit second phase of the development to condominiums that it is now in the process of selling under the name Front 9. The units are about 50% sold; the gross sell-out is expected to come in at approximately $55 million.

Kerry Nicholson, an SVP and partner with Legacy Partners Residential, tells GlobeSt.com that initially it appeared the condominium conversion would produce a lot more profit than the apartment complex rehab. It turned out to be the other way around, with the apartments selling at a record high per-unit sales price for Snohomish County.

“We had not modeled being able to re-trade the apartment complex at a cap rate in the 4% range,” he says. “Our pro forma had the exit cap rate higher than we bought it at, but the apartment side has remained very strong while the condo side has been ok but has gotten tougher with the subprime [meltdown]. We’re achieving our target IRR, we’re just getting there a different way.”

Dave Schumacher of Columbia Partners represented Legacy Partners in the sale to Pacific Property.

Legacy still owns Bella Terra, another apartment complex within Harbour Pointe, and last year acquired another golf course property at the other end of the Puget Sound area, the 545-unit On the Green at Northshore Apartments in Tacoma, for $50 million.

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