Shorewood Heights, a sprawling, mid-20th century apartment complex on the north end of Mercer Island, has a new owner.
An entity affiliated with Charleston, South Carolina-based Greystar on Tuesday paid $210 million for the 645-unit property. In one transaction, Greystar took control of much of the island’s apartment market.
By dollar volume, it’s King County’s second biggest apartment sale so far this year after last week’s record-setting sale of Tower 12 in downtown Seattle.
A limited liability company whose members include Seattle apartment investor John Goodman, Olympic Investors and a public pension fund sold Shorewood Heights. The group had paid $110 million for the 45-acre property seven years ago. Olympic Investors made significant upgrades to Shorewood Heights and was preparing to build a 57-unit addition, said Berkadia Senior Managing Director Kenny Dudunakis, who brokered the latest sale.
Investors were keen on the opportunity to own an asset in upscale Mercer Island. Shorewood Heights is within walking distance to the island’s transit center and future light-rail station. Dudunakis said around 20 offers were received.
“There are only a few iconic (multifamily) properties in Seattle and this is one of them,” he said.
Seattle real estate legend Charles Clise developed Shorewood Heights in 1949. Dudunakis said the property initially was military housing. It was a larger project to begin with, though some units were demolished to make way for the construction of Interstate 90, Dudunakis said.
Dudunakis said there are only 13 apartment properties with 20 or more units on the island, with a total of 2,110 units. Shorewood represents 40 percent of the Mercer Island multifamily market. Meanwhile, rents have increased nearly 38 percent over the last five years.
At Shorewood Heights, rents range from $1,600 for a studio to $4,325 for a four-bedroom, two-bath apartment. One bedrooms rent for $1,755.
“(The occupancy rate) always hovers in the mid to high 90 percent range,” said Dudnakis, who marketed Shorewood Heights with Berkadia colleagues Ben Johnson and David Sorensen.
Greystar is the 19th largest owner of apartments in the United States and the most active developer in the country, according to the National Multifamily Housing Council. It owns around 44,000 units and started construction of nearly 7,700 units in 2016.