Watertree Place Townhomes, a 37-unit residential complex, is located in Kent’s West Valley.
Constructed in 2011, this privately gated investment offered investors the opportunity to own Class A real estate in South Seattle’s rapidly growing market. In 2019, ownership engaged Ted Sipila and Austin Kelley (Kidder Mathews Team) on how to best maximize market value — ultimately seeking liquidity for ownership through its sale.
The History
Owned by the original developers, Watertree Place was constructed between 2008 – 2012. Out of the 42 separate lots that make up the 99,212 SF community, the Watertree offering consisted of 37. All lots consist of 3-bedroom 2.5-bathroom units ranging from 1,500 SF – 17,500 SF. Consistently operating at 100% occupancy, vacancies would generally arise through the first home purchases of residents. In 2019, ownership selected Kidder Mathews as its exclusive representation in marketing the property for sale. The offering was presented to investors as a stable investment with tremendous upside available through interior renovations and continued market growth.
The Challenge
Watertree’s broken HOA posed challenges for both investors and lenders. While the owner of this investment would have complete control over HOA (majority vote), uncertainty in the five privately held townhomes created questions of quality control and interest rate premiums.
The Results
With the team’s aggressive marketing campaign and professional approach to investor selection, the Kidder Mathews team was able to locate the outlier buyer who possessed an excellent resume and close personal lender ties. This combination of factors, paired with a high-quality asset, helped create a smooth transaction from preliminary negations to the closing table. The result was the highest price per door sale in the history of Kent, and a sub 5% capitalization rate. Both the buyer and the seller are well-positioned for continued long term growth.
