west seattle flats€¦ · a 9-unit asset in one of seattle’s urban sanctuaries. west seattle...

WEST SEATTLE FLATSOffering Memorandum

90

44

35

th Ave

SW

| SEATTLE

Matt MillerP: 206.566.6593C: [email protected]

EXCLUSIVELY LISTED BY

Investment Overview

Location

Financials

Comparables

Offer Guidelines

TABLE of CONTENTS

The information included in this document has been obtained from sources we believe to be reliable. While we do not doubt its accuracy, we have not verified it and cannot make any guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions, or estimates used are for example only and may not accurately represent the current or future performance of the property. The value of any proposed transaction to you depends on tax and other factors which should be evaluated by your tax, financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. © Pilot Ventures LLC.

INVESTMENT OVERVIEW

WEST SEATTLE FLATS | PILOT VENTURES | 5

A 9-unit asset in one of Seattle’s urban sanctuaries.


$140,720PROFORMA NOI

Price $ 2,500,000

Units 9

Price Per Unit $ 277,778

Rentable SF 8,651

Price Per SF $ 289

Current Cap Rate 3.76 %

Market Cap Rate 5.63 %

Current GRM 15.3

Market GRM 12.2

Year Built 1981

Parcel Number 609440-0005

Land SF 7,200

Zoning NC2P-55 (M)

Construction Type Wood Framed

Plumbing Copper/PEX

Parking 4 Tuck Under, 8 Surface

Laundry In-Unit Washer/Dryer

Hot Water Individual H20 Tanks

Heating Electric Baseboard

Roof Type Torchdown

Windows Dual Pane


Interior Photos

LOCATION OVERVIEW


WEST SEATTLE

QUEEN ANNE

LAKEWASHINGTON

PUGETSOUND

ELLIOTTBAY

BEACON HILL

DOWNTOWN

CAPITOL HILL


Seattle is a bustling metropolis, ranked by

the U.S. Census in the “Top 4 for Growth” for

five consecutive years. Since 2010, Seattle’s

population has increased 18.7%, bringing

an additional 114,412 residents to America’s

beloved Emerald City. Seattle has one of the

tightest office markets in the country and is

far less expensive than markets like New York,

San Francisco and Washington, DC. As a result

of a dynamic workforce driven by the tech

sector, many tech tenants have set up shop in

the region which is having an impact on the

multifamily sector boom.

It’s no stretch to appreciate how the lush,

green foliage and shimmering waters led a few

to Seattle. Unparalleled beauty and access to

the outdoors have helped attract some of the

best companies in the country. To the east and

west, the city is bordered by Lake Washington

and the Puget Sound. Out further, snowcapped

mountain ranges can be seen in every direction.

Home to a diverse and robust community, Seattle

is the cultural and business center of the Pacific

Northwest. The thriving tech sector has pushed

up the wages, software engineers averaging

$132,000/year, as well as the cost of rent.

Employment and population growth rates are

strong and stable, supported by the variety of

commerce and an ongoing demand for skilled

workers. Companies expanding in the metro

include Indeed, Lyft, Uber, Tableau (acquired by

Salesforce), Oracle, Apple and Best Buy. Apple

announced in June 2019 that it will expand its

Seattle workforce by 2,000 employees by 2022, up

from roughly 450 employees currently. Apple has

occupied space at Two Union Square in Seattle

CBD since 2015 and took all of the space at 333

Dexter in Lake Union, enough room for

seattle

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more than 4,000 employees. In addition, with the

highly anticipated relocation of Expedia in 2019

and the recent acquisition of Tableau by Salesforce

(Salesforce HQ2), Seattle continues to bring strong

talent into the core which fuels the absorption of

multifamily units.

Seattle was ranked the second-best city for

STEM workers by NerdWallet. The University of

Washington, a highly ranked school with a variety

of nationally recognized programs, prepares top-

tier students for roles at companies, such as the

Fred Hutchinson Cancer Research Center, the Allen

Institute and various cutting-edge tech companies.

Buzzing with new infrastructure, jobs and residents,

Seattle’s ever-growing metropolis is considered

home to many major employers who drive growth

and fuel the area’s economic climate including:

53,000 employees 4,500 employees

500 employees 235 employees320 employees

800 employees 525 employees700 employees

1,000 employees 800 employees1,000 employees

1,365 employees 1,186 employees1,250 employees

2,000 employees 2,000 employees5,000 employees

2,500 employees


seattle

Loca

l Att

ract

ions

Pike Place Market

Pike Place public market, overlooking the Elliott Bay

waterfront, first opened in 1907. Pike Place remains

Seattle’s most popular tourist desination and the 33rd

most visited tourist attraction in the world, with over

10 million visitors annually.

Northgate

Seattle’s Northgate neighborhood’s dense mixed-use

development is expected to be completed by 2021.

This transformative location, fueled in part by Seattle’s

new NHL team headquarters, training facility, and

community ice rinks, is adjacent to the new Link Light

Rail Northgate station.

West Seattle

Seattle’s eclectic West Seattle neighborhood is a quick

drive or water taxi ride from downtown. It is home to

an array of amenities including one of the city’s most

popular outdoor recreation areas, Alki Beach.

THAT’S OVER HALF THETOTAL POPULATION OF

WASHINGTON STATE3.9m

SEATTLE-TACOMA-BELLEVUEMSA POPULATION

14.2%GROWTH SINCE 2010

60k NEW RESIDENTSANNUALLY (AVG)



Expedia’s new $900 million HQ on Seattle’s waterfront opened in fall 2019. The site will house 4,500 Seattle metropolitan area employees as the company shifts operations from their Eastside Bellevue location to Downtown Seattle. Approvals are in place to continue future expansion to 8,000 employees at the campus.

Expedia, which spun out of Microsoft in 1999, is one of the world’s largest online travel companies. The brand umbrella includes Expedia, Hotels.com, Egencia, and Expedia Partner Solutions.

Google’s continued expansion in Seattle and Kirkland brings the total office space leased and owned to over 2 million square feet. Google currently has 4,500 employees in the region and its real estate portfolio gives the tech giant room for more than 10,000 people. Google is one of more than 130 companies from around the globe that have set up engineering centers in the Seattle area.

Google is a multinational technology company specializing in internet related services and products.

Facebook’s leasing velocity makes room for 23,700 new employees in the Seattle area, according to the 150 square feet per employee industry standard. Facebook’s recently signed lease includes 325,000 square feet in Block 6 of Bellevue’s Spring District. Facebook currently employs 5,000 people across Downtown Seattle, Bellevue, and Redmond. The projected headcount will easily exceed Facebook’s Silicon Valley offices, at approximately 15,000.

Facebook allows people to stay connected and share and express what matters to them. Other products and services owned by Facebook include Instagram, WhatsApp, Oculus, and GrokStyle.

Apple’s expansion in Seattle at 333 Dexter includes two 12-story office towers totaling 635,000 square feet, with room to house 4,200 employees. Seattle has become Apple’s hub for developing artificial intelligence and machine learning technologies.

The company designs, manufactures, and markets mobile communication and media devices as well as personal computers, and sells a variety of related software, services, accessories, and third-party digital content and applications. Apple is the world’s largest technology company by revenue and became the first public U.S. company to be valued at over $1 trillion.

EXPANDING TECH COMPANIES IN SEATTLE


seattle

Amaz

on’s

SLU

Cam

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Jobs: Amazon has created more than 53,000 jobs in Seattle since 2010 and 11,393 new job postings as of January 2020, with 30% of those in AWS, Amazon’s flagship cloud business.

Multifamily Demand: Amazon’s job growth has impacted neighborhoods surrounding South Lake Union, Bellevue, and the greater Puget Sound region.

Evolving Skyline: Amazon’s growth, with 12 million square feet leased or owned, has shaped the skyline of Seattle and driven consistent demand in the multifamily sector. In addition, Amazon’s rapid expansion in Bellevue could reach 4.8 million square feet and power spectacular growth in the area’s suburbs.

AMAZON’S EMPLOYMENT TRENDS IN SEATTLE

AMAZON’S SEATTLE GROWTH IMPACT

5.0 K8.5 K

11.0 K

16.0 K

21.0 K

27.5 K

38.0 K40.0 K

45.0 K

53.0 K

0.0 K

10.0 K

20.0 K

30.0 K

40.0 K

50.0 K

60.0 K

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019


647,500 employees






In total, Fortune 500 companies represent two-thirds of the U.S. GDP with $13.7 trillion in revenues, $1.1 trillion in profits, $22.6 trillion in market value, and employ 28.7 million people worldwide.

Washington state and the Puget Sound region are home to an array of Fortune 500 companies covering a variety of industries, including:

WASHINGTON STATE IS HOME TO 11 COMPANIES ON THE

2019 FORTUNE 500 LIST

Internet Services and Retailing

Technology

General Merchandisers

Food Services

Construction & Farm Machinery

Airlines

Transportation & Logistics

Forest & Paper Products

Industrial Machinery


puget sound

Empl

oym

ent

Hub

sSouth Lake Union

South Lake Union is the heart of Seattle’s tech hub, home to Amazon’s headquarters and a variety of cutting-edge technology and biotech companies including Juno Therapeutics, Allen Institute and Fred Hutchison Cancer Research

Seattle’s CBD is home to major finance, legal, government and insurance companies with a total of 35 million of inventory and 874,000 square feet of positive absorption in the office sector

Bustling core packed with entertainment, restaurants and artsy attractions

First Hill / Pill Hill

Home to major healthcare facilities including Harborview, Swedish, and Virginia Mason

Seattle University, the largest independent university in the Northwest, with over 7,500 students enrolled

Tourist destination that provides a plethora of dining, shopping and entertainment opportunities


Bellevue

The Eastside’s most sought after office submarket by tech companies including Amazon, Google and Facebook

Amazon has plans to add over 20,000 employees into this submarket by 2024

Downtown Bellevue has a current workforce of about 46,200 and is one of the top 100 most educated populations in the country

Redmond

World-renowned as the region’s hub for technological innovations

Home to Microsoft’s, SpaceX, Oculus (Facebook’s virtual reality headset division), and Nintendo of America

Microsoft expansion plans allow for up to 8,000 additional employees at its Redmond campus by 2023

Kirkland

Kirkland benefits from a high proportion of tech tenants including Google, Tableau, and GoDaddy

The downtown waterfront has an unparallel blend of public parks and beaches, fine dining, art galleries, and a performing arts center


WEST SEATTLE FLATS

9044 35th Ave SW, Seattle, WA 98126Su

bmar

ket

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seattle

The West Seattle Flats, ideally located in the Fauntleroy neighborhood of West Seattle, offer residents a desirable mix of suburban living and metropolitan amenities. Originally developed as a mixed-use condo building in 1981, the property is comprised of 8 spacious residential units situated above flexible commercial space.

The well-maintained property is well poised for growth in a rapidly changing and desirable submarket. West Seattle is considered one of the last urban sanctuaries in Seattle. While conveniently close to downtown, the neighborhood maintains its small town feel due to its location on the West Seattle Peninsula which stretches along the Puget Sound.

The spacious unit interiors feature comfortable amenities like fireplaces and balconies. The interiors have been tastefully updated. Recent improvements include in-unit washer/dryers, updated cabinets, laminate hardwood floors. Additionally, new hot water heaters were installed in 2018 and new energy efficient dual pane windows were installed throughout in recent years. The property consists of three 1-bed /1-bath units, five 2-bed / 1-bath units, 1,700 square feet of flexible commercial space, and an approx. 200 square foot storage area. The top floor units have vaulted ceilings and there are 12 off-street parking spaces in the back. Additionally, the 7,200 square foot parcel was recently upzoned to NC2P-55 (M), providing considerably more development potential.

The building offers residents convenient access to retail, easy access to the city, and plentiful outdoor recreation and entertainment options. The property was given a walk score of 81 which designates a ‘very walkable’ location. Westwood Village with Target, QFC, 24 Hour Fitness, and many others major retailers is located just 5 blocks east. Lincoln Park, with miles of beachfront trails and stunning views, sits less than a mile west of the apartments. Commuting is made easy with the C bus line within feet, fast access to Highway 99 and I5, and Downtown Seattle only a 15-minute drive away.

1981 Construction

Spacious floor plans

In-unit W/D

Units have hardwood floors and updated cabinets

Windows and hot water heaters replaced throughout

Units have balconies and fireplaces

4 tuck-under and 8 surface parking spaces

5 blocks to Westwood Village (Target, QFC, 24 Hour Fitness)

Nearby transit and 15 minute drive to CBD

Walk score 81 (very walkable)

Upzoned to NC2P-55 (M)

Ability to increase rents 24% to market on turnover


PROPERTY HIGHLIGHTS


EA

T +

DR

INK 1 C&P Coffee Company

2 New Luck Toy

3 Pho Aroma

4 Northwest Wine Academy

5 Fonda La Catrina

6 Ciudad

7 Lowercase Brewing

8 The Bridge

9 Zeeks Pizza

10 Katsu Burger

11 Caffe Ladro

12 The Westy

13 Tin Dog Brewing

14 Loretta’s Northwesterner

15 Endolyne Joe’s

16 Zippy’s Giant Burgers

17 Crawfish House

18 Dubsea Coffee

1 West Seattle Golf Course

2 Fauntleroy Park

3 Glen Acres Golf & Country Club

4 Rainier Golf & Country Club

1 West Seattle Thriftway

2 Walgreens

3 The Home Depot

4 QFC

5 Westwood Village

6 Safeway

7 McLendon Hardware

8 Castillos Supermarket

1 24 Hour Fitness

2 InUrLane Fitness

3 Full Range Fitness

4 The Heart Center Yoga

5 Viha Aerial Yoga

6 Brace Point Pilates

7 Innate Vitality Pilates

8 Antares Wellness

RE

CR

EA

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NS

HO

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ING

WE

LNE

SS

WEST SEATTLE

WALKSCORE.COM

81 56553

2

FAUNTLEROY | West Seattle | 98126

FAUNTLEROY

1

2

3

4 5

6 7

8

910

11

12

13 14

15

16

1718

12

5

6

7

8

3

4

1

1

2

3

4

5

6

4

78

2

PUGETSOUND

BELLEVUE 35

MINUTES

MERCERISLAND

30 MINUTES

LAKEWASHINGTON

LOCAL ACCESS MAP

FACTORIA 32

MINUTES

LAKESAMMAMISH

RENTON 28

MINUTES

SEATTLE 15

MINUTES

GEORGETOWN 10

MINUTES

TUKWILA 20

MINUTES

SEA-TAC 21

MINUTES


FINANCIALS


* Unit square footages are estimated

RENT ROLL

UNIT Type Approx SF Current Rent Current / SF Market Rent Market / SF

101 1 Bd / 1 Bth 605 $ 1,300 $ 2.15 $ 1,550 $ 2.56

102 2 Bd / 1 Bth 984 $ 1,400 $ 1.42 $ 1,950 $ 1.98

103 1 Bd / 1 Bth 821 $ 1,400 $ 1.71 $ 1,750 $ 2.13

201 2 Bd / 1 Bth 984 $ 1,650 $ 1.68 $ 1,950 $ 1.98

202 2 Bd / 1 Bth 984 $ 1,600 $ 1.63 $ 1,950 $ 1.98

203 1 Bd / 1 Bth 605 $ 1,325 $ 2.19 $ 1,550 $ 2.56

301 2 Bd / 1 Bth 984 $ 1,600 $ 1.63 $ 1,950 $ 1.98

302 2 Bd / 1 Bth 984 $ 1,600 $ 1.63 $ 1,950 $ 1.98

100 Office Commercial 1,700 $ 1,750 $ 1.03 $ 2,500 $ 1.47

8,651 $ 13,625 $ 1.67 $ 17,100 $ 1.98


CURRENT PRO FORMA

Gross Potential Rent $ 163,500 $ 205,200

Vacancy $ (8,175) 5.00 % $ (10,260) 5.00 %

NET RENTAL INCOME $ 155,325 $ 194,940

OTHER INCOME

RUBS $ 0 $ 8,100

Misc $ 0 $ 600

Total Other Income $ 0 $ 8,700

EFFECTIVE GROSS INCOME $ 155,325 $ 203,640

EXPENSES

Property Taxes $ 21,019 $ 21,920

Insurance $ 5,500 $ 5,500

Utilities: W / S / G / E $ 13,800 $ 13,800

Maintenance & Repairs $ 6,300 $ 6,750

Resident Management $ 11,979 $ 11,200

Reserves $ 2,250 $ 2,250

Admin / Misc $ 500 $ 500

Landscaping $ 0 $ 1,000

Total Expenses $ 61,348 $ 6,816 / Unit $ 62,920 $ 6,991 / Unit

NET OPERATING INCOME $ 93,977 $ 140,720

FINANCIAL ANALYSIS

COMPARABLES

Property Address Building Name Units Price Sale Date Price/Unit Price/SF Cap Rate Year Built

1 6708 California Ave SW Morgan Junction 6 6 $ 2,000,000 9/25/19 $ 333,333 $ 310 4.10 % 2006

2 9043 35th Ave SW Rogene Apartments 13 $ 2,935,000 3/12/20 $ 225,769 $ 368 5.35 % 1959

3 5212 California Ave SW Sunset Manor 19 $ 5,150,000 12/17/19 $ 271,053 $ 362 4.44 % 1969

4 8857 Delridge Way SW Westbrook Apartments 17 $ 4,130,000 12/18/19 $ 242,941 $ 377 5.33 % 1962

5 6001 California Ave SW West Aires 8 $ 2,500,000 7/15/19 $ 312,500 $ 338 4.04 % 1953

AVERAGES $ 277,119 $ 351 4.65 %


1 2 3 4 5

SALES COMPARABLES


WEST SEATTLE

MORGAN JUNCTION 6

6708 California Ave SW

ROGENE APARTMENTS

9043 35th Ave SW

SUNSET MANOR


WESTBROOK APARTMENTS

8857 Delridge Way SW

WEST AIRES


11

22

33

44

55

PUGETSOUND

SALES COMPARABLES

FAUNTLEROY

11

22

33

44

55


WEST SEATTLE FLATS9044 35th Ave SW

Units 9

Net Rentable SF 8,651

Year Built 1981

Laundry In-Unit

Parking 9 Surface Stalls

Sale Details

Sale Date TBD

List Price $ 2,500,000


Price Per SF $ 289

Cap Rate 3.86 %

SUBJECT Notes

• (5) 2 bd / 2 bth units (984 SF)• (3) 1 bd / 1 bth units (677 average SF)• Updated cabinets and laminate

hardwood floors• In-unit W/D, balconies, and fireplaces• 12 off street parking spaces

SALES COMPARABLES

1

2

MORGAN JUNCTION 66708 California Ave SW

Units 6


Year Built 2006

Laundry In-Unit

Parking 6 Garage Spaces

Sale Details

Sale Date 9/25/19



Price Per SF $ 310

Cap Rate 4.10 %

Notes

• 2 bd / 1 bth units (1,074 average SF)• 2006 construction• Laminate counters, carpet, In-unit W/D

ROGENE APARTMENTS9043 35th Ave SW

Units 13


Year Built 1959

Laundry Common


Sale Details

Sale Date 3/12/20



Price Per SF $ 368

Cap Rate 5.35 %

Notes

• 85% 1 bd / 1 bth units (613 average SF)• Renovated kitchens and bathrooms• Income stabilized


4

5

WESTBROOK APARTMENTS8857 Delridge Way SW

Units 17


Year Built 1962

Laundry On-Site

Parking Carport & Surface

Sale Details

Sale Date 12/18/19



Price Per SF $ 377

Cap Rate 5.33 %

Notes

• 76% 1 bd / 1 bth units (643 average SF)• Laminate countertops• Stainless steel appliances & LVT flooring

WEST AIRES6001 California Ave SW

Units 8


Year Built 1953

Laundry Common


Sale Details

Sale Date 7/15/19



Price Per SF $ 338

Cap Rate 4.04 %

Notes

• 2 bd and 3 bd floorplans• Original unit interiors

3 SUNSET MANOR5212 California Ave SW

Units 19


Year Built 1969

Laundry Common


Sale Details

Sale Date 12/17/19



Price Per SF $ 362

Cap Rate 4.44 %

Notes

• 90% 1 bd / 1 bth units (695 average SF)• Mixed-use building - 2 commercial

tenants (340 total SF)• Granite counters with original cabinets,

appliances, and carpet

SALES COMPARABLES


Property Address Building Name Unit Type Unit SF Rent Rent /SF

1 7524 35th Ave SW Hill Crest 1 Bd / 1 Bth 500 $ 1,860 $ 3.72

2 2615 SW Barton St 2615 SW Barton St 1 Bd / 1 Bth 564 $ 1,595 $ 2.83

3 9020 35th Ave SW The Hurricane 1 Bd / 1 Bth 638 $ 1,595 $ 2.50

4 9051 20th Ave SW The Blue Stone 1 Bd / 1 Bth 748 $ 1,750 $ 2.34

AVERAGES 613 $ 1,700 $ 2.85

RENT COMPARABLES

1 2 3 4

Property Address Building Name Unit Type Unit SF Rent Rent /SF

1 7524 35th Ave SW Hill Crest 2 Bd / 2 Bth 760 $ 2,257 $ 2.97

5 2200 SW Barton St Westwood Vista 2 Bd / 1 Bth 850 $ 1,875 $ 2.21

6 2201 SW Holden St Westhaven Apartments 2 Bd / 1 Bth 850 $ 1,995 $ 2.35

7 7901 Delridge Way SW Lighthouse Apartments 2 Bd / 1 Bth 954 $ 2,050 $ 2.15

AVERAGES 854 $ 2,044 $ 2.42

5 6 7


DELRIDGE

HILL CREST

7524 35th Ave SW

2615 SW BARTON ST

2615 SW Barton St

THE HURRICANE

9020 35th Ave SW

THE BLUE STONE

9051 20th Ave SW

WESTWOOD VISTA

2200 SW Barton St

WESTHAVEN APARTMENTS

2201 SW Holden St

LIGHTHOUSE APARTMENTS

7901 Delridge Way SW

11

22

33

44

RENT COMPARABLES

FAUNTLEROY

55

66

77

11

22

33

4455

66

77

OFFER GUIDELINESOFFER GUIDELINES

Pilot Ventures is pleased to announce

All questions and inquiries regarding tours and this opportunity should be addressed to the Pilot Ventures representatives listed herein. Pilot Ventures’ team will be available to assist prospective investors with questions upon their review of the offering. Investors will receive advanced notification of the bid deadline via email. Offers should include, at a minimum, the following:

• The purchase price, contingencies and closing date;

• The amount of earnest money deposit;

• The source of capital for down payment;

• A detailed timeline for the transaction;

• A brief overview of the Buyer’s qualifications.



Built upon trust and experience, Pilot Ventures was founded by principals Casey Zejdlik and Jason Kono.

Specializing in multifamily investments and property management services, our focus on long-term client success is at the core of everything we do.

At Pilot Ventures, our experienced team of industry professionals offer more than 50 years of creative investment expertise. We engage with every client in a goal-oriented manner to enhance their portfolio and maximize results.

Together, we don’t just build equity— we build relationships.

BrokerageWhether you’re buying or selling, our experienced team of brokers will ensure you receive the best possible representation.

SyndicationOur firm’s financial expertise and professional management allows individuals, families, partnerships and trusts to invest in income producing properties without worrying about the day-to-day operations. We provide a full-service approach to every stage of your multifamily real estate investment.

ManagementManaging properties can be an overwhelming experience— in working with Pilot Ventures, we help streamline processes and systems to maximize your cash flow and ROI.

pilotNW.com

Brokerage / Syndication / Management

west seattle flats€¦ · a 9-unit asset in one of seattle’s urban sanctuaries. west seattle...

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