Dealmaker: Freddie Mac Lends $30M on Seattle-Area Apartments

New Standard Equities, Encino, Calif., and a Brixton Capital affiliate acquired Arbor Terrace in Port Orchard, Wash. from Sea 1800 Sydney Avenue LP in a $38.1 million transaction.

Freddie Mac, McLean, Va., provided a $30.15 million loan to finance the 276-unit multifamily community.

The deal represents New Standard Equities’ second acquisition in the area in less than two months and its third in Kitsap County in the past year, said company CEO and founder Edward Ring.

Ring said he views Arbor Terrace as a value-creation opportunity. “When we initially looked at this asset we immediately saw a tremendous potential to improve the property’s cash flow through renovation,” he said. “Given that the U.S. Navy is such a huge economic driver in the county, we became excited about the prospects for continued long-term growth in this submarket.”

New Standard Equities plans to spend $3 million to reposition the asset’s 1995-vintage unit interiors and improve the property’s leasing facility and curb appeal, Ring said.

Arbor Terrace complements New Standard Equities’ recent $13.25 million of 120-unit Village Fair apartments in Bremerton, Wash. from a private seller, Ring said, noting that he plans to invest $1.8 million to bring the 1984-vintage asset up to modern standards. Arbor Terrace, Village Fair and Sea Glass Village, a 182-unit community purchased last year, bring New Standard Equities’ Kitsap County asset base to 578 units at a total cost basis exceeding $65 million.

Andrew Kirsh, head of the real estate practice at law firm Sklar Kirsh LLP, Los Angeles, represented the buyer in the transaction. “The market volatility following the election created a challenging atmosphere, which seriously threatened the deal,” he said. But the new joint venture plans to acquire other value-add opportunities in the future, he noted.