Cooling Condo Sales Tied to Seattle Rental Growth, $48M Sale

Taking advantage of a Seattle apartment market with a high barrier to entry, Sobrato Development Cos. has acquired Expo62 (pictured), a 114-unit apartment complex in the Lower Queen Anne area of the city from Intracorp Real Estate L.L.C. in a $48 million deal. “The complex will be completed this month. Originally planned as a for-sale condo community, the project was switched to apartments because of the slowing condo sales in the area,” Jeffrey Williams, partner in the Pacific Northwest office of Chicago-based Moran & Co., which brokered the deal, told CPN. “With a very robust apartment market with very little supply or delivery coming online coupled with the robust rent and job growth, this project was very attractive to investors,” Williams added. The softening condo market has created opportunities for Sobrato Development to add to its residential portfolio on the West Coast, according to company information. According to a Marcus & Millichap Real Estate Investment Services report, apartment rental rates are rising rapidly and vacancy is reaching a seven-year low there. Due to low apartment vacancy rates and rising rents, builders are shifting away from sluggish condominium sales and directing resources toward apartment construction. Additionally, some former condo units are coming back to the market as rentals as a result of a cooling for-sale housing market, the report stated. Sobrato information indicated that the six-story Expo62 is the only large new apartment community coming on the market in Seattle’s urban core this year. “The project is very well located in the shadow or reflection of the Space Needle and is really in a downtown neighborhood where it is hard to build and expensive to build,” Williams said.Blog Story and Comments