When it was the La Mirage Apartments two years ago, the 1980s-era complex in Kent sold for $32.5 million. Now it’s the Knol, and it has traded hands for $44.5 million.
The difference was a “full-blown renovation” of the 216-unit East Hill property at 11239th SE 260th St., said George Petrie, CEO of Goodman Real Estate, the Seattle company that sold the property. Forum Real Estate Group, a private equity investment firm based in Glendale, Colorado, is the new owner.
“That’s (Forum’s) MO – buy renovated, leased-up assets,” said Kidder Mathews Executive Vice President Dylan Simon, who listed the property.
The sale is one of the few occurring in the Covid market.
During the first half of 2020, only nine apartment properties in South King County sold for a combined $100.2 million. That compares to 62 sales worth nearly $1.2 billion all of last year, though 2019’s numbers were goosed by a higher tax rate on larger property sales that took effect at the start of 2020.
Sales in the second quarter after Covid struck nearly came to a halt, putting the region on track for its lowest annual sales volume in more than four years, according to Kidder Mathews.
The Knol went on the market in mid-March around the start of the pandemic, presenting challenges for Simon and colleagues Jerrid Anderson and Matt Laird.
Simon said the market is at an inflection point and the result is a gaping bid-ask spread with buyers seeking deals and owners rarely agreeing to them. Owners still have pre-Covid expectations on pricing whereas buyers are waiting to see how the pandemic economy shakes out.
There are a lot of properties for sale. Simon said the question is whether owners will get the prices they want or hold.
This is the second large Seattle-area suburban property Goodman has sold in recent weeks. The other was a nearly $49 million deal for a new Newcastle property. Petrie said Goodman will deploy the capital into new investments.