SEATTLE, WA - Security Properties purchased Beaumont Grand, a 267-unit, Class B multifamily property located in Lakewood, WA for $35,200,000. The property was originally developed in 1995 and consists of 23 two and three story residential buildings spread out over more than 11 acres.
Geographically, the city of Lakewood is situated just 9 miles south of Tacoma and less than two miles east of the Puget Sound. The property's strategic location also affords residents convenient access to two of the area's largest employers. Joint Base Lewis-McChord, the largest military base on the west coast, is located ~15 minutes south and supports a total of 66,000 jobs. Additionally, the 800-bed Western State Hospital employs roughly 2,100 and is located less than one mile west of the property.
Lakewood is a submarket that has strong job drivers, but very limited supply. Since 2002 only two properties, totaling 306 units, have been built in the area with no planned future apartment developments. This, combined with the significant rent growth currently being experienced in Seattle's first ring, is pushing people out of the core into markets like Lakewood where the rents are much more affordable.
One of the property's most unique features is its large units. At an average of 939 square feet, Beaumont's floor plans are by far the largest in its competitive set. Additionally, Beaumont Grand is one of only two gated communities in the area creating a higher-end feel.
Beaumont Grand represents a value-add investment with moderate interior and exterior renovation characteristics. Security Properties plans to renovate all units. The new spec will include black appliances, cabinet doors with modern pulls, upgraded lighting, paint and baseboard along with flooring.
In order to effectively reposition the asset, the current business plan also includes capital focused on the modernization of resident common areas and amenity spaces. Additional major projects include a roof replacement and full exterior paint.
According to Davis Vaughn, Director at Security Properties, the acquisition was made because, "this was a basis buy for us in a submarket with zero supply. We believe in JBLM long term and like opportunities where we can come in significantly below replacement cost. With a low basis and value-add upside, we expect this acquisition to outperform the overall market and create value for our investors."
The property will be managed by Security Properties-affiliate Madrona Ridge Residential