RSRC acquired a 60-unit plus retail distressed condo project in Seattle’s infill West Seattle neighborhood. The project required approximately $3.7 million of construction costs to complete, mostly consisting of interiors, plumbing, electrical and minor work to the building exterior. The property was re-branded and leased-up as apartments. Total project capitalization was $11.4 million ($187k/unit and $281psf) and the stabilized cap rate will be 7.0% versus current market cap rates of 4.75% – 5.00% for new product.
RSRC completed construction on schedule in January 2013. The building was fully leased in six months. The retail space was leased to a restaurant. RSRC sold the asset in June 2014 for $15.5M, a 33% IRR and a 1.65x equity multiple over a 26-month hold.