Grosvenor Americas Acquires 360-Unit Seattle-Area Apartment Complex

By Gail Kalinoski, Contributing Editor

Grosvenor Americas has added to its Seattle multi-family holdings with the acquisition of Waterford Place Apartments, a 360-unit community in Woodinville, Wash. The global property group now owns or has stakes in 10 multi-family communities in the Seattle area.

“The acquisition of Waterford Place continues to meet our strategic objective of building a portfolio of value-add rental properties in the Puget Sound region,” said James Delmotte, senior vice president, investments, Grosvenor Americas. “Continued job growth in the region, favorable interest rates, and an improving economy add to the appeal of this acquisition.”

Delmotte said there is a confidentiality agreement in place prohibiting him from releasing the sale price or the seller.

He told Commercial Property Executive that the company plans to spend about $5 million to upgrade the apartment interiors, landscaping, signage, clubhouse and other amenities.

“We will be rebranding the property in due course,” Delmotte said. “Until then, the property will be called Waterford Place Apartments.”

The 18-acre property has 17 three-story buildings and includes a clubhouse, two swimming pools, indoor spa, fitness center and tennis courts. There are 637 parking spaces spread among surface lots, garages and carports. Located about 10 miles from Seattle, Warterford Place is close to Interstate 4-5 and Highway 522 so residents can reach job centers in Redmond, Bothell and Everett as well as downtown Seattle.

Pete Shelton, senior director of the National Multi-Housing Group at Cushman & Wakefield, and Kim Grant, a broker with the same group, represented the seller.

All of the firm’s multi-family properties are currently located in the Puget Sound region, but it is developing The District, a 125-unit, luxury rental property on 14^th Street in Washington, D.C., with The JBG Companies. The development, expected to open this fall, will have about 1,800 square feet of ground-floor retail. Grosvenor Americas also has multi-family developments in various stages of planning in San Francisco; Los Gatos, Calif.; Silver Spring, Md., and Calgary and Vancouver in Canada.

But Delmotte said Grosvenor Americas is also open to buying more multi-family assets.

“We will continue to selectively acquire multi-family properties where we believe we can add value through operations and renovation,” he said. “Favorable demographics combined with a difficult for sale market will provide a solid basis for continued strength in the multi-family market.”

That certainly seems to be the case in the Seattle area, where vacancy rates continue to decline to pre-recession levels while rents are rising. Also in buyers’ favor, low interest rates, according to the third quarter 2012 Marcus & Millichap Apartment Research Market Report.

“With borrowing costs at extremely low levels, acquiring apartments in major metros such as Seattle makes sense for investors looking for a favorable spread with limited risk,” the report noted.

The multi-family market in Seattle is being driven by the strong economic climate in that region. Employers in the Seattle-Tacoma metro area are expected to hire 45,000 workers this year, a 2.7 percent increase over 2011. Many of those jobs are in major technology firms like Amazon and Microsoft. Development is also on the rise, giving blue-collar workers jobs too. Some of that construction is occurring in multi-family developments, according to the Marcus & Millichap report. More than 1,100 units were delivered last year and approximately 4,200 rentals are under construction with about half due for completion this year. About 13,000 more units are in planning stages and could boost the apartment stock by 6 percent, the Marcus & Millichap report stated.

Among the apartment communities Grosvenor Americas owns in the region are Woodcreek Apartment Homes, a 164-unit complex in Lynwood and Northshore Townhomes, an 86-unit luxury townhome community in Kenmore. Both assets were purchased in 2010 in joint ventures with Mosaic Homes of Seattle. Other jointly owned residential properties are in Kirkland, Renton, and Seattle. Whollly-owned Seattle area multi-family communities include BluWater in Silver Lake, Chelsea at Juanita Village in Kirkland and Peloton in Redmond. In all, it has 1,660 units in the region.

Grosvenor is a privately-owned company with offices in 18 cities around the world, including several in the United States and Canada as well as London; Paris; Madrid; Sydney, Australia; Hong Kong and Tokyo. As of Dec. 31, 2011, the group had total assets under management of $19.4 billion.