Expanding its footprint in the Pacific Northwest, Pathfinder Partners (“Pathfinder”), has announced the $31.1 million acquisition of Cedardale – a 126-unit community at 2501 SW 336th St. in Federal Way, Washington, a suburban neighborhood located between Seattle, Tacoma and the Kent Valley.
According to Mitch Siegler, co-founder and managing director of Pathfinder, a San Diego-based private equity firm specializing in multifamily real estate investments, Cedardale marks Pathfinder’s 14th acquisition in Washington and its second acquisition within Pathfinder Multifamily Opportunity Fund IX, LP (“Fund”) – which is focused on opportunistic acquisitions of suburban, value-add multifamily real estate in markets where Pathfinder has significant experience. These markets include Denver, Phoenix, San Diego/Southern California, Sacramento and Seattle.
“Pathfinder has deep experience in Seattle’s Federal Way submarket having previously owned three properties in the area and currently owning a property in the neighboring town of Fife,” Siegler said. “Cedardale has a low-density, serene ambiance and is walkable to several retail centers, including the adjacent Twin Lakes Shopping Center anchored by Safeway and numerous restaurants and retail stores.”
Cedardale was originally built in two phases from 1981 to 1983 as condominiums, but no units were sold. Now operated as a rental community, the property features mature, lush landscaping – with units featuring wood-burning fireplaces, washer/dryers, dishwashers, stainless steel appliances and private decks or patios. Community amenities include a central clubhouse with a coffee bar and complimentary Wi-Fi, a covered picnic area with BBQs, playground, fenced dog park, sport court with basketball and bocce ball and car vacuum station. Units encompass a mix of 64 one-bedroom/one-bathroom units, 16 two-bedroom/one-bathroom units and 46 two-bedroom/one and one half-bathroom units ranging from 608 to 905 square feet.
“Pathfinder’s Fund IX acquired Cedardale at an attractive cost basis of $247,000/unit with future upside through our value-add business plan. We believe the purchase price is 15-20% lower than peak pricing and 30-35% lower than replacement cost, and we plan to add significant value by modernizing the apartments.” Siegler said. “Seattle’s economy continues to be strong, propelled by the technology, aerospace, healthcare and life science sectors, and Cedardale’s location is known for its strong rental market and ease of accessibility throughout Seattle’s employment centers.”
Marking the firm’s 13th acquisition in Washington, Pathfinder Partners, a San Diego-based private equity firm specializing in multifamily real estate investments, has announced the $28.15 million ($268,000 per unit) purchase of Sundance – a 105-unit apartment community at 210 27th Avenue in Milton, Wash., a suburban neighborhood just south of Seattle.
According to Mitch Siegler, co-founder and managing director of Pathfinder Partners, Sundance was sold to Pathfinder by the original developer, SEB, Inc. and consists of nine three-story residential buildings and a community building with a clubhouse, leasing office and fitness center. Originally built in 2004, the community has a mix of 18 one-bedroom/one-bathroom units, 42 two-bedroom/one-bathroom units, 24 two-bedroom/two-bathroom units and 21 three-bedroom/two-bathroom units ranging from 725 to 1,160 square feet. Units feature washers/dryers, nine and 10-foot ceilings on the upper floors, electric fireplaces, private decks or patios and walk-in closets. Other highlights include a pool and jacuzzi, community picnic area with BBQs and a playground and 24 detached garages.
Siegler notes that Sundance provides a unique opportunity to operate a high-quality property in a well-established, centrally located Seattle submarket. “The property is very low density at 12.5 units per acre with large floorplans. We plan to improve the common areas to include a new BBQ area, dog park and package locker as well as upgrade the unit interiors – including updated bathrooms and kitchens – and operate Sundance as a stabilized, cash-flowing investment,” Siegler said. “Seattle’s economy continues to be strong, propelled by the technology, aerospace, healthcare and life science sectors, and Sundance’s location is known for its excellent schools with home prices averaging $750,000.”
Sundance is the 13th property in the Pathfinder Income Fund, L.P. (“Fund”), a stabilized multifamily fund open to accredited investors. With a focus on stabilized, income-producing, Class-B apartments, the Fund has acquired approximately 1,500 apartments across six markets in the western U.S. “The Fund’s conservative approach to leverage, bias toward fixed-rate debt and emphasis on cash-flowing properties provides investors with an income-generating, tax friendly investment opportunity with downside protection,” Siegler said.
“There continues to be a tremendous opportunity for investors to take advantage of the ongoing housing supply/demand imbalance by adding multifamily real estate to their portfolios,” he added. “With a stabilized and diversified portfolio of properties with low-cost, fixed-rate debt, the Pathfinder Income Fund provides an attractive and low-risk alternative to the bond market – with superior upside.”
107-Unit Apartment Community Sold for $30.9 Million
Pathfinder Partners, a San Diego-based firm specializing in multifamily real estate investments, announced today the sale of The Sterling, a 107-unit community in Gilbert, Arizona, 23 miles southeast of downtown Phoenix. The property was acquired by Casa Anita Apartments, LLC for $30.9 million.
The Sterling (previously named “The Vintage”), built in 2000 as condominiums, is situated on 9.3 acres and includes 13 residential buildings consisting of six studio lofts, 21 one-bedroom/one-bathroom, 40 two-bedroom/two-bathroom and 40 three-bedroom/three-bathroom units averaging a spacious 1,154 square feet.
According to Lorne Polger, senior managing director of Pathfinder Partners, his firm purchased The Sterling in December 2017 and completed $1.4 million in extensive renovations. “We understood the importance of The Sterling’s location – only two miles from the Gilbert Heritage District, a popular shopping destination. Additionally, the city boasts a combination of strong employment growth and a nationally ranked school system.”
Pathfinder invested in repainting the buildings, installing a dog park and package locker, renovating more than half of the units and upgrading the clubhouse, leasing office and pool area.
The Sterling was 97% occupied at the time of the sale. David Fogler of Cushman & Wakefield Multifamily Advisory Group brokered the transaction.
56-Unit Apartment Community Purchased for $18.2 Million
Pathfinder Partners, a San Diego-based firm specializing in multifamily real estate investments, announced today the $18.2 million acquisition of Highlands at Red Hawk – a 56-unit apartment community in the affluent submarket of Castle Rock, just south of Denver, Colorado. Red Hawk is Pathfinder’s 11th Colorado acquisition and the sixth apartment property in the Pathfinder Income Fund, launched earlier this year.
According to Mitch Siegler, senior managing partner at Pathfinder Partners, “Red Hawk presents an outstanding cash-flowing investment with nearly new units in an upscale, growing market. Located just 15 minutes from the Denver Tech Center, Red Hawk residents enjoy a short commute to many of the area’s largest employers and to over two dozen retailers and restaurants.”
Constructed in 2017, Red Hawk includes 16 one-bedroom/one-bathroom units, ten two-bedroom/one-bathroom units, 22 two-bedroom/two-bathroom units and eight three-bedroom/two-bathroom units averaging 1,064 square feet. Each unit includes granite countertops, stainless steel appliances, walk-in closets, in-unit washer/dryers and fireplaces. The property features a robust amenity package including fob entry access, a community pool, fitness center, game room, coffee bar and BBQ/picnic area. Built by a homebuilder with the intent to sell condominiums, it has unique features for a rental community, including a direct-access garage and private entrance for each unit.
Located in Castle Rock, the southern portion of the Denver metro area near Highway 25, the community provides easy access to major employers like RingCentral, Apple, VMware and Zillow. Additionally, Red Hawk is located near Castle Rock’s downtown area, with an eclectic assortment of restaurants and retail stores as well as close proximity to the 300-acre Philip S. Miller Park, which includes batting cages, golf simulators, indoor soccer and football fields, indoor pool and trampoline area and zip line tours. Red Hawk is within the Douglas County School District, one of the best in metro Denver.
According to Siegler, Red Hawk provides a unique opportunity to operate a well-located community in the rapidly growing Castle Rock area. “We plan to make minor repairs and upgrades to the property and operate it as a stabilized, cash-flowing investment,” Siegler said. “The Castle Rock economy continues to be strong, propelled by the healthcare, education and professional services sectors – in the past ten years, the population growth in Castle Rock has averaged 4.5%, more than double the 1.6% national average. Because of great schools, an affluent population and over $1 billion in new development in the area, Castle Rock appears poised for solid growth.”
San Diego-Based Firm Adds Eight Multifamily Properties Locally
Expanding its hometown presence, San Diego-based Sunrise Management, which has specialized in managing multifamily properties since 1978, has added eight San Diego multifamily communities totaling 155 units to its portfolio.
According to Sunrise CEO and president Joe Greenblatt, his company will assume the leasing and day-to-day operations of the properties and assist with approximately $2.6 million in capital improvements to the communities including upgrades to interiors, common areas, landscaping and more.
Primarily located in urban San Diego, the communities – all owned by San Diego-based Pathfinder Partners as part of its Pathfinder Tradewinds platform – include:
· The Marlin, eight units in west City Heights
· Las Palmas, 36 units in Hillcrest
· The Dorado, 25 units in west City Heights
· The Wahoo, 13 units in west City Heights
· The Amberjack, 18 units in Normal Heights
· The Bluefin, nine units in North Park
· Driftwood, 24 units in Pacific Beach
· Canary Palms, 22 units in Poway
With these latest additions, Sunrise now oversees more than 6,000 units throughout Southern California.
“These new properties expand our San Diego presence, where we have operated for more than 40 years and position us for further growth throughout the region,” Greenblatt said.
60-Unit Apartment Community Purchased for $8.4 Million
Pathfinder Partners, a San Diego-based firm specializing in multifamily real estate investments, announced today the $8.4 million acquisition of Park Paloma – a 60-unit apartment community just south of the Lower Arcadia neighborhood at 2930 North 46th St., Phoenix, Ariz.
According to Mitch Siegler, senior managing partner at Pathfinder Partners, “Park Paloma presents an outstanding value-add investment opportunity with units that have never been renovated and significant upside to enhance the community’s amenities. Located near the highly desirable Lower Arcadia neighborhood, Park Paloma is walking distance to the Arcadia Crossing Shopping Center, which includes Costco, Target and over two dozen other retail, restaurant and commercial tenants.”
Constructed in 1973, Park Paloma offers a mix of one-bedroom/one-bathroom and two-bedroom/two-bathroom units, ranging from 760 to 980 square feet. The units are in original condition with tile flooring, wood cabinetry, laminate countertops and gas stoves. Each unit features an open floorplan concept featuring French doors to the master bedroom, walk-in closets and private balconies or patios. Amenities include a resort-style swimming pool, fitness and laundry facilities, covered parking and a shaded BBQ courtyard which can host parties or events.
The community is just eight miles northeast of downtown Phoenix near Highway 202 and Thomas Road, providing access to major employers such as JPMorgan Chase, IBM, Cisco and UBS and is less than six miles away from the Phoenix Sky Harbor Airport, the Phoenix Zoo and the Arizona State University, Tempe campus. Park Paloma is located within the highly ranked Scottsdale Unified School District.
According to Siegler, Park Paloma has compelling value-add investment opportunities, and Phoenix has strong market dynamics. “We plan to upgrade the units with new flooring, cabinets, appliances and fixtures. The Phoenix economy continues to be strong, propelled by the healthcare, education and professional services sectors – in the last three years, job growth in Phoenix has averaged 3.7%, more than double the 1.6% national average. Because of robust job growth – as well as over 2.9 million square feet of new construction and companies such as Nationwide and Deloitte expanding in the area – Phoenix appears poised for solid growth.”
