Kennedy Wilson Buys 2 Communities for $110M
The properties are located in two Pacific Northwest metros.
A Kennedy Wilson-managed fund has acquired Axle, a 226-unit community in Seattle, and Denizen, a 212-unit community in Portland, Ore., for a total of $110 million. The previous owner was Quarterra Multifamily.
Kennedy Wilson has an 11 percent ownership stake in the real estate fund, which acquired the two properties with a total equity investment of $40 million. The fund financed the acquisitions with long-term fixed rate debt totaling $70 million.
“High levels of new supply as a percentage of inventory in Seattle and Portland have created a temporary surplus of housing in these markets, driving occupancy and revenues down while necessitating concessions from landlords,” Kurt Zech, president of Kennedy Wilson’s Multifamily Group told Multi-Housing News.
However, he adds, demand for high quality rental housing is robust in Seattle and rapidly improving in Portland, and over the next 18 months apartment fundamentals will dramatically improve in both markets. The company is encouraged by the underlying strength of those employment markets, Zech says, where return-to-office initiatives are well underway, which will drive demand over the longer term.
New apartment construction in Seattle has virtually come to a halt, while strong demand has sustained rent growth this year, according to Yardi Matrix, which also reports that new units are still being delivered in Portland. Even so, Portland has been able to sustain rental rates so far this year.
Property details
Axle, completed in 2018, features one- and two-bedroom floor plans and eight townhomes. The community was 97 percent occupied at the time of the sale, according to Yardi Matrix data. Rents range from approximately $1,568 a month for a 565-square-foot one-bedroom unit to more than $3,300 a month for a 1,454-square-foot townhouse.
Unit amenities include washers/dryers, microwaves, high ceilings and high-speed Internet. Common-area amenities include a resident lounge, sky lounge and outdoor deck, fitness center, pet run, game room and coworking spaces.
Located at 3230 16th Ave. West, Axle is approximately 4 miles from downtown Seattle. Dining, retail and a gold course are within walking distance.
Denizen, completed in 2020, offers studios, one- and two-bedroom units as well as ground-floor retail. Its residential units were 93 percent occupied at the time of the sale, according to Yardi Matrix data. Rents range from approximately $1,334 a month for a 431-square-foot studio to over $2,900 a month for a 929-square-foot two-bedroom unit.
Unit amenities at Denizen include a similar package as Axle, with washers/dryers, microwaves, high ceilings and high-speed Internet. Common amenities include a fitness center, clubhouse and business center, with covered parking available for an extra fee.
Located at 2050 NE Hoyt St., Denizen is less than 3 miles east of downtown Portland.
Quarterra has been in a selling mode recently. Earlier this year, KKR acquired a portfolio of 18 multifamily properties totaling about 5,200 units from a fund sponsored by Quarterra for about $2.1 billion. The portfolio includes recently completed mid-rise and high-rise properties.
