Case Study – 7 Units in Wallingford

Key Deal Points

  • 3832 Eastern Ave N, Seattle, WA 98103
  • $1,650,000
  • $453 / SF
  • Highly desirable North Lake Union Wallingford location
  • Buyer achieved 15% improvement on gross rents within 3 months of acquisition

 

Daniel and the Lee Multifamily Team were instrumental in navigating us through the acquisition process when multiple issues including the determination of two non-conforming units could have prevented us from successfully establishing our portfolio in Seattle.
- Song

For more information regarding this case study, please contact:

Candice Chevaillier, CCIM

Principal
D  (206) 773-2694
cchevaillier@lee-associates.com

 

Daniel Lim

Vice President
D  (206) 773-2692
dlim@lee-associates.com

 

Dea Sumantri

Associate Vice President
D  (206) 773-2680
dsumantri@lee-associates.com

 

Chris Larsen

Associate
D  (206) 773-2695
clarsen@lee-associates.com

Challenge

Successfully syndicating deals in other major markets, the client desired to establish investments in their home city of Seattle. A prime location and strong return were key factors for establishing a presence in Seattle. After losing out on another opportunity, they were looking to land the perfect value-add deal in a competitive market. After, identifying an opportunity that was just two blocks from Seattle’s landmark Lake Union, the Lee & Associates Multifamily team guided the client through successfully negotiating a competitive offer and getting under contract. The deal was not without its surprises, the building needed significant updates necessitating tenant relocation, the interest rate environment was beginning to deteriorate, and it was discovered that two of the units were not permitted.

Action

Realizing the deal had quickly become a very complex for their client’s first Seattle acquisition, the Multifamily team dug in and began reaching out to multiple City departments and connecting local building experts to get the Buyer up to speed with local zoning codes, the relocation process, and now to successfully navigate these variables. The team also proactively reached out to the client’s out-of-state lender to educate them on market and the situation. Getting the lender up to speed, the team built a cohesive group to problem-solve the challenge at hand.

Result

With client, lender and broker all on the same page, the deal team was able to come up with an acceptable solution which provided the client with enough proceeds to close while protecting their long-term interest rate and still allowing them to perform renovations shortly after closing. Overcoming multiple barriers to entry, the client successfully acquired their first holding for their Seattle portfolio.