Carmel Partners has started 2021 off with a bang, selling its recently completed Hyde Square in Bellevue, Wash., for $279.1 million. The 618-unit transaction marks the largest multifamily deal to close in the Seattle metro since Oxford Properties’ $320 million purchase of a 461-unit high-rise last summer.
Documents filed with King County indicate the buyer was DWS, acting through its RREEF America REIT II subsidiary. As part of the deal, the buyer assumed $128.5 million in existing debt from AXA Investment Managers. Carmel had taken the loan in early 2017 to finance the development of the community, Yardi Matrix shows.
A Berkadia team led by Kenny Dudunakis, senior director of the firm’s Seattle office, represented the buyer in the transaction.
Located at 2030 155th Place NE, the four-building community was the Seattle market’s largest delivery of 2019. The property offers a mix of studio, one- and two-bedroom floorplans ranging from 495 to 1,122 square feet, and 35 apartments are reserved as affordable housing units. Amenities include a wellness center, two rooftop lounges, a clubhouse, a pet spa and a business center.
The property is 2 miles west of Lake Sammamish, a short distance from the 148th Avenue Northeast retail corridor. Downtown Seattle is 15 miles west, accessible via both Interstate 90 and the Evergreen Point Floating Bridge.
Tech growth lifting rents
Amid ongoing wider economic woes, Bellevue stands out with a flurry of activity over the past year, particularly in the tech sector. In September, Commercial Property Executive reported that Amazon signed leases totaling 2 million square feet in the city. At around the same time, Facebook shelled out nearly $370 million for REI Co-op’s recently delivered—but unused—headquarters, located alongside space already occupied by the social media giant.
The influx of tech jobs has had a notable impact on the city’s affordability: Puget Sound Business Journal reported a 33 percent increase in two-bedroom rents in Bellevue between 2019 and 2020. Rent growth is now likely to be far more constrained, however—Yardi Matrix shows rents in the Bellevue–West submarket have dropped 6.4 percent year-over-year through December.
Given that rents are likely to rebound before long, some tech companies have taken steps to address area affordability concerns. In January, Amazon revealed a $2 billion affordable housing fund, intended to drive development and preservation of affordable units in the Puget Sound region as well as near the e-commerce giant’s HQ2 in Arlington, Va., and its new operations hub in Nashville, Tenn.
*The article was updated on Feb. 5 to include additional details about the buyer’s representation.