SEATTLE, WA - Security Properties, a Seattle-based national real estate investment and operating company, announced that it has purchased the Honeyman Hardware Lofts building at 514 Northwest 9th Avenue for $20.25 million. Security Properties will now embark on a $4.6 million renovation of the 89-unit mixed-use Pearl District building, adding value while maintaining the building's historic identity. The building includes 26,982 square feet of retail space.
Today's announcement finishes a joint venture that began in 2006, when Security Properties purchased the Portland property in a joint venture with the Boston-based Equity Resource Group (ERG). The original intent of the partnership was to create a new development on the site and increase the overall unit count by 49 units. Instead, with ERG's fund life approaching the end of its term, the joint venture partners decided to list the property for sale in fall 2011. After assessing the existing and potential value of a renovated property, the Security Properties Multi-Family Fund, along with a new east coast joint venture partner, purchased the asset for $20.25 million.
Now, Security Properties plans a major renovation of both the exterior and interior of the building, including the addition of a new leasing office and amenity space adjacent to the main entry corridor on Park Ave. The renovation will bring the total unit count to 101 units.
"We are excited to begin renovation plans that should maximize the potential of the Honeyman Hardware Lofts block and firmly establish this landmark property's position as a cornerstone of the Pearl District," said David Dufenhorst, Chief Investment Officer for Security Properties.
Honeyman Hardware Lofts was originally built as a hardware store and warehouse between 1903 and 1912. In the late 1980s the building was converted to loft-style apartments. Located in the heart of the Pearl District, the property is surrounded by upscale restaurants, retailers, organic grocers, microbreweries and art galleries.
The building is well-positioned to thrive as the neighborhood around it grows and evolves. Portland's North Park blocks are planned for expansion immediately across the street and the Pacific Northwest College of Art is expanding in the immediate area. Two light rail lines operate within four blocks of the property. Demand for the kind of apartment and loft spaces envisioned by Security Properties' renovation plan is expected to increase significantly in the coming years. Additionally, the joint venture will make use of zoning that allows for the conversion of street-level retail into work-live lofts to accommodate demand specific to the Pearl District community.
"We are pleased to joint venture with our new East Coast capital partner and we believe both sides will benefit from the expertise each brings to the deal," Dufenhorst said. "With the knowledge Security Properties has acquired about this specific property over the past few years, and our established presence in the Portland Market, we are excited to begin renovation plans that should maximize the potential of the Honeyman Hardware Lofts block and firmly establish this landmark property's position as a cornerstone of the Pearl District."
Wells Fargo Real Estate Group provided the debt on the transaction.
Security Properties is a national real estate investment and operating company headquartered in Seattle, Washington with over 40 years of experience in both affordable and conventional multifamily rental housing. The company's broad range of capabilities includes acquisitions, development, financing, asset and property management, dispositions and advisory services. As one of the largest owners of multifamily real estate in the country, Security Properties has acquired or developed nearly 64,000 conventional and affordable housing units spanning over 440 properties in more than 40 states.