PORTLAND, OR – Global real estate investment company Kennedy Wilson has bought Savier Street Flats, a wholly-owned 179-unit apartment community in Portland’s Northwest neighborhood for $60 million. KW invested $27 million of equity, and assumed an eight-year loan of $33 million at a fixed-rate of 3.5%. The buy comes on the heels of several large KW apartment acquisitions in the Portland area and reflects a continued focus on recycling capital into high-quality properties located in high growth markets.

“Portland has established itself as one of the fastest growing apartment markets in the United States, and we are pleased to expand Kennedy Wilson’s presence into a region that is forecasted to continue its upward trajectory,” said Shem Streeter, Managing Director at KW. “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. Like many of the major urban markets along the West Coast, all signs point to an increased need for well-located housing like what we are offering at Savier Street Flats.”

Savier Street Flats was the final acquisition utilizing the 1031 exchange proceeds generated from the recent sale of Summer House, a wholly owned 615-unit apartment community in Alameda, CA. Constructed in 2013, Savier Street Flats is 47 years newer than Summer House, provides walkable access to the city’s best dining and retailers as well as proximity to major local employers, and features modern amenities while also incorporating the historic character of the surrounding neighborhood.

The LEED Platinum-certified Savier Street Flats includes a mix of studio, one, and two-bedroom units ranging from 553 square feet to 1,062 square feet across two mid-rise buildings. The community includes a fitness center, indoor and outdoor resident lounges, a pet spa, a bike wash and repair station and controlled access parking for vehicles and bikes. On the ground floor, residents have access to two retailers – Abbey Bar and Bottleshop and ZoomCare, a prominent health services provider. Kennedy Wilson plans to invest up to $2 million to further enhance the amenities and common areas on site, as well as the leasing office, property signage and branding.

The acquisition of Savier Street Flats is the third significant buy for KW in the Portland region in recent months. KW secured Heatherwood Apartments in Gresham, Oregon, for $51 million in October 2017 with plans to invest another $5 million in the property over the next several years. In September 2017, the company bought the Latitude apartments in Pleased Valley, Oregon, for $58 million.

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TIGARD, OR – Security Properties and Cigna Investment Management bought Arbor Heights, a 348-unit, Class A multifamily property located in Tigard, OR, for $81,000,000. This was Security Properties’ fourth joint venture with Cigna Investment Management. 

The property is located within the outlying suburbs of the Portland Metro in Tigard, OR. Tigard is most notably recognized for its rolling hills, dense greenery, and silent feel in an otherwise booming market. Arbor Heights rests on the border of the Bull Mountain neighborhood, long recognized as Tigard’s most prominent suburb and one of the more affluent neighborhoods outside of the Portland Metro. Median home values in Tigard are currently approximately $403,000 compared to neighboring Beaverton at $365,000 and Hillsboro at $349,000.

Arbor Heights is a Class A garden-style apartment community that was constructed in 1997. The asset consists of 348 units spread out across 14 residential buildings and 24.49 acres. The units feature well-appointed kitchens, spacious walk-in closets, in-unit full-size washer/dryers, private patios/balconies as well as territorial views from roughly 50% of units.

The business plot is focused on completing a comprehensive renovation. Unit interiors currently contain a variety of interior spec levels as a by-product of the property’s historical ownership changes. Most recently, a total of 54 units received a high-end spec including: stainless steel appliances, new cabinet doors with pulls, kitchen quartz countertops with under-mount sinks, gooseneck faucets, faux wood (vinyl sheet) flooring, two-tone interior paint, kitchen and bathroom hardware, microwaves, digital thermostat, USB outlet, curved shower rods, rainfall showerheads, and 2″ faux hardwood blinds. SP plans to make minor enhancements to this spec by adding quartz in the bathrooms, new interior doors and bathroom mirror surrounds in each of these 54 previously renovated units. The partnership will also be renovating the remaining 208 original units with a comparable interior scope while leaving the 86 units that were renovated in 2008 in their current. From an amenity standpoint the business plot includes upgrading the dog park area and outdoor kitchen adjacent to the pool as well as adding a package concierge, bike storage and outdoor living area.

Davis Vaughn, Senior Director at Security Properties says, “Arbor Heights was a deal we focused on because of the unique competitive advantages it has over the rest of the marketplace. With territorial views in many units, a walkable grocery store, and a public school system about to receive $291 million in improvements via a recent bond approval, Arbor is ideally positioned long term. When we combine these factors with our value-add renovation, we expect Arbor to perform well and make value for our investors.”

The property will be managed by Security Properties-affiliate Security Properties Residential.

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