Security Properties Make Record-Setting Multifamily Buy

Security Properties has set a record for the largest real estate transaction in the Seattle region so far this year.

The locally based firm acquired five Seattle-area multifamily properties from Washington Holdings for $400.8 million, the Puget Sound Business Journal reported. It dwarfs the second-priciest transaction this year when Terreno Realty‘s $232.6 million acquired nine industrial buildings in Woodinville last month.

The portfolio contains a total of 903 units. In the city of Seattle, the transaction includes the Liza apartments at 2517 Eastlake Avenue East in Eastlake, The Hemlock at 8704 Greenwood Avenue North in Greenwood and The Hayes on Stone Way at 3627 Stone Way North in Fremont. In downtown Redmond, Security Properties picked up Carter on the Park at 7508 159th Place Northeast and Heron Flats & Lofts nearby at 7662 159th Place Northeast.

In total, the properties boast more than 900,000 square feet, and all were developed in the past decade. Freddie Mac provided $165.8 million in loans for the acquisition, according to the Business Journal.

“Most portfolios in our space tend to be diversified because a lot of investors don’t want a concentrated slug of the same product,” Mark Bates, chief investment officer at Security Properties, told the Business Journal. “This is all newer, nicer product.”

Interested buyers seemingly gravitated toward the portfolio due to the slowdown in new residential buildings in the region.

“We felt the lack of new multifamily construction in the greater Seattle market would usher in above inflationary rent growth that buyers could reasonably put in their financial models and the buyer pool seemed to agree with this view,” Washington Holdings CEO Craig Wrench told the Business Journal.

The deal marks the second time this year Security Properties bought a property from Washington Holdings. In April, the Seattle-based real estate firm acquired The Henry Apartments in Seattle’s Queen Anne neighborhood for $34.7 million. — Chris Malone Méndez