Colliers is pleased to announce the sale of Terri Ann Apartments, a 25-unit multifamily building located at 1331 Terry Avenue in Seattle’s First Hill neighborhood. Tim McKay, Dan Chhan, Sam Wayne and Matt Kemper represented the seller, a local investor, and sourced Seattle-based Cadence Real Estate as the buyer in the transaction, which closed today for $6,300,000.
The sale of Terri Ann highlights a renewed demand for value-add opportunities in Seattle’s central city. Multiple buyers were eager to acquire a growth-ready asset early in the city’s emergence from market slowdown brought on by COVID-19. The property itself offers significant upside potential; the building was originally constructed in 1967 and many units have not been updated recently, leaving room to quickly increase value.
“Terri Ann was a highly competitive listing, resulting in nearly a dozen offers,” McKay said. “The potential to increase both the property’s income and value through unit upgrades, combined with rebounding tenant demand for space in the urban core was especially appealing to investors looking to get an early foothold in the post-COVID market recovery. We expect to see sustained interest in assets located in this area as the market continues to improve.”
Like many neighborhoods in central Seattle, First Hill is quickly recovering from the setbacks faced by the city’s urban core over the past 18 months, including the COVID-19 pandemic, continued problems with homelessness, and civil unrest. Average rents in the Capitol Hill submarket, which includes First Hill, increased 1.5 percent to $1,761 in the first half of 2021 after falling 12 percent since early 2020. According to real estate intelligence firm Yardi Matrix, rents in Capitol Hill are expected to increase 9.3 percent YOY by Q1 2022. Development interest in the submarket has also remained strong, with 2,203 units currently under construction. In First Hill, specifically, the neighborhood’s central location has been a driving factor of this revitalization. First Hill’s access to hundreds of nearby dining and entertainment options and walking-distance proximity to employment centers in Downtown Seattle, Capitol Hill and South Lake Union make it an ideal environment for tenants to live, work and play.