Seattle—Alliance Residential Company has sold Domaine, a 92-unit multifamily community in Seattle it acquired in 2009, to a public REIT. Essex Property Trust purchased the community.
The five-building property near Lake Union in one of Seattle’s trendiest enclaves was built in 2008. After acquiring the property, Alliance undertook a targeted re-branding initiative to reposition the community toward residents accustomed to condominium-grade standards of living, but desiring the convenience of leasing.
It was one of the first deals converted to rental in the marketplace.
Domaine is comprised of one studio, 51 one-bedroom and 40 two-bedroom apartments. Common-area amenities include a 24-hour fitness center, modern clubroom for events, pet park and leasing office.
“At the time of acquisition, Domaine was available at a very attractive basis, and Alliance was drawn to Domaine’s impeccable location,” Russ Kindorf, director of investments for Phoenix-based Alliance Residential Company, tells MHN. He adds both the physical location and its proximity to job centers appealed to Alliance. The company was also attracted by the upscale, condo-like finishes in the units.
“Upon takeover, Alliance decided to convert three live-work units to amenity spaces,” he says. “Generally, projects built as for-sale condos offer limited amenity spaces, if any are offered at all. And our decision to incorporate amenities consistent with the vibe and culture of the Seattle area proved to be key to Domaine’s successful conversion.”
At the time Alliance acquired Domaine, interest in financing was very low, requiring the company to close the deal all cash and put financing into place after closing, Kindorf says.
Faced with Domaine’s reputation as a failed condominium project, Alliance was also compelled to launch a focused advertising strategy designed to reverse the property’s negative perception within the greater Seattle area.
Alliance chose to keep the name and draw on some of the benefits of marketing that had already been undertaken on behalf of the property.
“Once we secured website and collateral, we developed our presentation of the rental conversion with a focus on appealing to the target renter-by-choice demographic,” Kindorf adds.
At the time Alliance acquired Domaine, it had no residents. Once the conversion of the project had taken place, Alliance provided a professional management team to oversee the community. “Three years of successful rental operation later, we sold Domaine for one of the highest per-door prices ever achieved in Seattle for a property without a commercial component,” Kindorf says.