by Adina Marcut
Tri-Cities, Wash.—Security Properties, alongside an institutional equity partner, has acquired RiverPointe Apartments, a 228-unit, Class B multifamily property located in Richland, Wash., and CrossPointe Apartments, a 200-unit, Class B community located in Kennewick, Wash., for a total of $41.3 million.
Both Class B assets are vintage, garden-style apartment communities built in 1996. Security Properties plans to renovate both assets, which were purchased for $22.3 million and $19 million, respectively.
“These acquisitions represent Security Properties continued effort of locating value in a competitive multifamily space. While the DOE’s massive Hanford Site contributes significantly to the highly educated work force and high median incomes in Richland and Kennewick, Benton County has quietly seen growth in healthcare, education and agriculture as well. When combined with relatively low apartment supply, we expect this market to continue to perform well. At an average basis of $96,495/unit and highly favorable cap rates relative to our debt rates, these investments will enjoy excellent risk adjusted returns to our investors,” Barrett Sigmund, senior director at Security Properties, said in prepared remarks.
The communities were financed with assumed HUD mortgages at an attractive 3.42 percent average fixed rate. RiverPointe and CrossPointe will be managed by Security Properties-affiliate Madrona Ridge Residential.
According to Yardi Matrix data, the CrossPointe community boasts an occupancy rate of 93.5 percent as of September 2016.