A real estate company recorded a hefty profit this month with the recent disposition of two suburban apartment complexes north of Seattle for a total of $243 million.
Grosvenor Americas this week sold the Bridges at Northcreek, a 524-unit property in Bothell, for $145 million to Griffis Residential of Englewood, Colorado. Earlier this month, Grosvenor sold Campbell Run, a 360-unit complex in Woodinville, for $98 million to Acacia Capital Corp., of San Mateo, California.
Public records show that Grosvenor had acquired the Woodinville property in 2012 for just over $58.4 million, and the Bothell property in 2013 for $88 million. The combined value of the properties is up 66 percent.
Griffis and Acacia are among the crowd of investors buying up suburban apartment complexes in the Puget Sound region. Supply and demand are behind this, said Giovanni Napoli and Philip Assouad, the Kidder Mathews brokers who put these latest transactions together.
The suburbs are experiencing strong rent growth due to increased demand from tenants getting priced out of the city. And unlike in-city markets, where thousands of new apartments are being built, outlying areas aren't seeing as much new supply.
Napoli and Assouad said investors are especially hungry to buy properties near employment centers. Campbell Run is about 10 miles from Microsoft's headquarters and Google's Kirkland campus, and the Bridges apartments is next to a business park where Microsoft, Boeing, Phillips Medical, Seattle Genetics and other companies have offices.
The properties were attractive to investors because they are garden-style apartments, or "woody walkups." Napoli and Assoaud said these complexes, which consist of numerous two- to three-story buildings with parking in front of the buildings, often are more appealing to a certain segment of the market - particularly families - than mid-rise apartment buildings.
Both properties are nearly leased up with rents in the $2 per square foot range. The rent for a one-bedroom apartment at Campbell Run is around $1,550, while a one-bedroom rents for $1,475 at Bridges, the brokers said.
Grosvenor extensively renovated both properties, and the new owners plans to continue making upgrades, the brokers said. Another change is the name of Bridges at Northcreek; it's now Griffis North Creek Bothell.
A Grosvenor representative said the company's strategy for the properties was to renovate and sell when market conditions were conducive.
In the Puget Sound region, the company still owns four apartment properties totaling 704 units as well as some Bothell office buildings that total 712,000 square feet.
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