Security Properties Buys Portland-Area Apartments
- Oct 19, 2016
Lake Oswego, Ore.—Security Properties and Pacific Life Insurance Co. have acquired One Jefferson, a 347-unit multifamily property located in Lake Oswego, Ore., for $78 million. The seller was Jackson Square Properties, which acquired the property with Friedkin Realty Group only three years ago for $63 million.
One Jefferson Apartments is a garden-style apartment community built in 1987 and 1990. The property will be managed by Security Properties-affiliate Madrona Ridge Residential.
The property is located in the Portland suburb of Lake Oswego, which is home to some of the area’s most expensive single-family real estate (the average home price is $585,000). Lake Oswego is also a high-income place, with an average household income in excess of $84,000 per year.
Overall, Portland’s an expensive housing market, and that’s driving demand for apartments. According to Marcus & Millichap, homeownership is out of reach for many households, as the minimum qualifying income for a mortgage is nearly $12,000 more than the median household income in the Portland metro area. The strong demand for multifamily has thus kept the average vacancy rate well below 5 percent.
Security considers the property a value-add. “This deal epitomizes what we look for in value-add projects,” said Barrett Sigmund, senior director at Security Properties. Given the barriers to entry and limited future supply, he noted, there should be little new product in the submarket for the foreseeable future.
Unit interiors currently contain a variety of interior finishes, and due to this inconsistency, Security Properties will be focusing on establishing more uniform interiors. The company will also improve amenity areas and the overall aesthetics of the property as part of the upgrade.