Dealmaker: Kennedy Wilson Acquires Two Pacific Northwest Multifamily Assets

Kennedy Wilson, Beverly Hills, Calif., acquired two Pacific Northwest multifamily assets for $195 million.

In Issaquah, Wash., the firm acquired Atlas, a 343-unit apartment community, for $135 million. It invested $52 million and secured an $84 million 10-year interest-only loan. The fixed-rate loan priced at 3.86 percent.

Atlas was one of four properties acquired through a 1031 exchange with proceeds Kennedy Wilson generated by selling Summer House, a 615-unit Alameda, Calif., community.

“We have identified Issaquah as a particularly desirable eastside submarket with significant potential for continued growth,” Kennedy Wilson Managing Director Shem Streeter said, noting Kennedy Wilson now owns more than 10,000 apartment units in Washington.

The I-90 corridor adjacent to Atlas houses employers including Microsoft, Siemens and Costco and the Issaquah Commons shopping center across the street recently opened a new Trader Joe’s, Safeway and Target.

Atlas represents Kennedy Wilson’s second significant Issaquah purchase in recent months. The firm also secured 90 East, a 573,000-square-foot office campus in Issaquah this summer and negotiated a 177,000-square-foot lease extension with Costco within four months.

In Portland, Ore., the firm acquired 179-unit Savier Street Flats NW for $60 million by investing $27 million in equity and assuming an eight-year, $33 million loan fixed at 3.5 percent.

Streeter said Portland is one of the fastest-growing apartment markets in the United States. “With its relatively low cost of doing business, high quality of living and highly educated population, Portland has become one of the country’s strongest economies anchored by high-tech growth.”

Constructed in 2013, Savier Street Flats has units ranging from 553 square feet to 1,062 square feet across two mid-rise buildings.