MONROE — Coast Equity Partners sees a bright future here with its purchase of a 222-unit apartment complex for $26.4 million. It was the year’s third-largest apartment acquisition in Snohomish County.
The Everett-based private real-estate syndicate acquired the Morning Run Apartments in Monroe for $26.4 million on May 29, said partnership principal Josh Jansen.
It was the fifth acquisition of a sizable apartment community for Coast Equity Partners since two-time Republican gubernatorial candidate and former state Sen. Dino Rossi joined the firm in 2009, said Tom Hoban, CEO of Coast Group of Companies and its commercial real estate brokerage, Coast|Sperry Van Ness in Everett.
“We’ve been looking at Monroe for four years now,” Hoban told The Herald Business Journal. “The big change is the Highway 522 expansion that will boost commuters’ confidence” to get to jobs in Bothell and the Eastside.
“The city has a higher-than-average household income to support retail, its political leadership is pro-jobs and residents can commute to major employment centers in 20 minutes,” Jansen said of Monroe.
Morning Run was built in 1991. It sits on 10.4 acres just southeast of the intersection of Highway 522 and U.S. 2.
Hoban compared Monroe to the thriving Eastside suburb Issaquah of 20 years ago.
“Monroe situates very similarly, but with a stronger local employment story and better commuter lines,” he said. “Once U.S. 2 gets the business loop to fix the traffic choke through downtown, Monroe may become one of the best places to live and work in the region.”
Jansen has lived in Monroe for almost 10 years and used his knowledge of the community to persuade his partners. That gave them more reason “to believe in the community,” Hoban said.
The partners — Jansen, Rossi, Hoban, his brother and company co-founder Shawn Hoban and Coast Equity Partners President Mike Harmon — paid $118,919 per unit to get Morning Run Apartments.
“We paid exactly what we wanted to pay,” Tom Hoban said.
Earlier this year, the 524-unit Northcreek complex in Bothell sold for $88 million, or $167,939 per unit. On the Green at Harbour Pointe in Mukilteo sold for $49.6 million on May 9, or $168,537 for each of its 294 units.
The Snohomish County Assessor’s Office valued Morning Run Apartments at $18,981,000 for 2013. Snohomish County property records show a previous sale in 2005, when Crown Capital Properties sold the complex to Essex Morning Run Apartments LP for $19.6 million.
“Morning Run was the only property we were interested in,” Hoban said. “When it went on the market, there were a dozen different buyers.”
“We have a big appetite for apartment product in the suburban markets,” said Harmon.
Since 2009, the group has acquired apartment properties in the Ballard neighborhood of Seattle and in Arlington and Bellingham.
Coast Equity Partners now owns more than 20 income properties throughout the Pacific Northwest with an approximate market value of $180 million, Hoban said. Syndicate investors have backgrounds in business, professional sports and other endeavors.
Coast Equity Partners is part of the Coast Group of Companies. Hoban said its property management arm manages more than $1 billion of office, apartment, retail and medical-dental buildings for investors, nonprofits, hospitals, housing authorities and other entities throughout the Pacific Northwest. Its brokerage group, Coast|Sperry Van Ness, is one of the largest independent commercial brokerage firms north of Seattle.
Kurt Batdorf: 425-339-3102; kbatdorf@heraldnet.com. More from The Herald Business Journal: www.theheraldbusinessjournal.com
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