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March 02, 2016

Equity snaps up another Capitol Hill apartment building

Puget Sound Business Journal

Marc Stiles

If you're going to rent an apartment on Seattle's Capitol Hill, chances are increasing that Equity Residential will be your landlord.

Public records show that on Monday, Equity (NYSE: EQR) paid nearly $25.9 million for the Packard, a six-story building at 1530 12th Ave. It's the second asset in this part of the neighborhood that Equity has acquired during the last three months. In addition, Equity is planning a 140-unit project where Piecora's Pizza operated.

In 2014, Chicago-based Equity was the sixth largest apartment owner in the country, with 109,465 units, according to this list published by Multifamily Executive magazine. Equity is selling off suburban assets across the country, including the Puget Sound region, and focusing its investment and development efforts in urban markets. More about this is here.

This week's purchase of the Packard and the December acquisition of the nearby Pearl apartments are the latest examples of this strategy. In 2014, Equity bought another Capitol Hill building at 320 E. Pine St. as well as the Piecora's property. These purchases add up to a total investment of $105.8 million by the company on Capitol Hill, where Equity owns two other properties, the Rianna and the Heights. In addition, the company is building a 40-story tower in Seattle at Second Avenue and Pine Street downtown.

Equity bought the 61-unit Packard, which was so named because it was built where the car company had a showroom, from Seattle real estate developer Maria Barrientos and investor Dan Ederer. Barientos also developed the Pearl, but with a different investor, Costco Wholesale Chairman Jeff Brotman.

The facade of the 1911 Packard building was incorporated into the development. It was one of the first redevelopments on Capitol Hill to to this. Barrientos said her company pledged to neighbors to keep the facade if they didn't oppose the project, which was finished in late 2009.

Now this approach is common on Capitol Hill, which is in the midst of a tsunami of development, especially along the trendy Pike/Pine corridor. All this activity threatens the character of Capitol Hill, and is why the city created a program that lets builders build bigger projects if they keep the facades. The Packard was nearly done before the City Council OK'd the program.

The one-bedroom and loft units in the Packard are larger than similar apartments in the neighborhood. These units, if they have views, rent for around $2,280 a month, said Barrientos, while smaller studios are going for $1,675, according to the Packard's website.

Giovanni Napoli and Philip Assouad, brokers with Kidder Mathews, marketed the property for sale.

For the full story, go to Puget Sound Business Journal.

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