The Hillcourt Apartments, built in 1985, is an attractive, legal 72-unit* four-story apartment building in North Seattle’s desirable Lake City/Olympic Hills neighborhood. Hillcourt offers easy access to the University of Washington and many of the region’s premier employers on the Eastside, in downtown Seattle, and in South Lake Union. The two buildings that comprise the Hillcourt Apartments are well maintained and boast a number of desirable features including new dual-pane vinyl windows, intercom entry, 2 laundry rooms, 67 surface parking spaces, an elevator, a manager’s office, and newer pitched composition roofs. The property’s 72 units (one currently used as an office) offer an excellent unit mix of one studio, 63 one-bedroom units, and 8 two-bedroom apartments, all with decks/patios except the singular studio. Hillcourt offers management upside, rent upside, an opportunity to increase utility billbacks and other income, the option to charge for parking, and the potential to reconfigure the on-site office into a studio unit while maintaining the office.
Hillcourt Apartments is listed at $175,000 per unit and $284 per foot with a 4.2% current cap rate based on a 5% pro forma vacancy rate and current rents. There is the potential for income upside to likely achieve a mid-5% cap rate or better, based on cost, by renovating units and potentially adding in-unit laundry. In year one, rental rates could potentially be raised by approximately 15% with basic upgrades upon turnover, and for a heavier value-add, a new operator could likely install in-unit washer/dryers for a rent increase in the ±30% range. Additionally, the purchaser of the Hillcourt could stabilize the RUBS system and begin charging for parking. Further, the on-site office could be converted back into an income-producing one-bedroom apartment. Or, to maintain the office, a portion of the space could be converted to a studio unit.
Located in North Seattle’s Lake City/Olympic Hills neighborhood, Hillcourt is roughly 8 miles north of downtown Seattle, 5 miles north of the University of Washington, and approximately two and a half miles northeast of the Northgate Mall and the future Northgate light rail station. Hillcourt’s excellent location just a block and a half from State Route 522 provides access to many of the region’s major employers that are expanding their Eastside presence – Microsoft, Google, Facebook, and Amazon – all without a toll, unlike State Route 520 to the south. Additionally, the property’s proximity to Interstate 5 and Highway 99 connects residents to the employment and entertainment centers of not only Lake Union and downtown Seattle, but also to Boeing, and other Snohomish county employers to the north.
Hillcourt is positioned within a 10-minute walk of the retail hub located at the intersection of State Routes 522 and 523. The property is within a half-mile radius of 14± food and drink establishments, and within a two-mile radius of 15 grocery retailers including Safeway, Albertsons, and QFC, as well as Target. For outdoor recreation, residents of the Hillcourt Apartments can frequent one of the numerous parks, playgrounds, and open spaces in the area, including Little Brook Park, just steps away. There are 6 public bus lines within a 6-minute walk of the property, and the future Northgate and Shoreline South light rail stations, 3.5 and 1.8 miles away respectively, are scheduled to open in 2021 and in 2024.
The 1980s-built Hillcourt Apartments’ 72 units*, a rare size in the Seattle market, are accessed through a secured intercom entry via interior corridors which have recently been outfitted with new carpet, paint, and lighting. Units feature decks/patios (80% of which have been repaired recently), dishwashers, disposals, and recently installed dual-pane windows. Residents benefit from an elevator, two laundry facilities in the south building, and 67 parking spaces. Hillcourt’s dual pane windows were installed in 2021, pitched composition roofs are nearly new (2019) and the exterior was last painted in the summer of 2020.
The Hillcourt Apartments, built in 1985 and comprised of 72* apartment units and 67 off-street parking spaces, will appeal to value-add investors looking for a larger in-city Seattle multifamily property. With its desirable location, upside, and probable appreciation, coupled with today's currently low interest rates, Hillcourt Apartments is an excellent investment.
*ONE UNIT CURRENTLY FUNCTIONS AS AN OFFICE BUT COULD BE CONVERTED INTO A STUDIO AND OFFICE OR SIMPLY CONVERTED BACK INTO A ONE BEDROOM.
|Address||3022 NE 140th St, Seattle, WA 98125|
|Price / SF||$283.91|
|Price / Unit||$175,000|
|Current Cap Rate||4.2%|
|Market Cap Rate||5.4%|
|Lot Size||39,201 SF|
North Seattle is desirable, not only for its easy access to the employment and entertainment centers of both Seattle and the northern areas of Puget Sound, but also for its diversity, walkability, and community-oriented environment. North Seattle is bounded by the Puget Sound to the west and Lake Washington to the east. The community provides excellent access not only to downtown Seattle, but also to the major employment hubs of Everett and Bothell.
North Seattle boasts two major north-south thoroughfares – Interstate 5 and Highway 99 – as well as a collection of State Routes that make navigating through the area simple and efficient. Additionally, the location allows commuters who work on the Eastside the option to avoid the State Route 520 toll bridge and access the Eastside via State Route 522 along the northern end of Lake Washington.
Comprised of many diverse neighborhoods, each offering residents a wide array of employment, educational, recreational, and retail options, North Seattle’s central location with easy access to major employers like Boeing, Amazon, Google, Facebook, and Microsoft makes it an excellent home for young professionals.
Public transportation is an important amenity of North Seattle, and Hillcourt is located within easy walking distance of several bus lines. The property is steps from a stop for routes 64 and 65 with connections to the University of Washington, the UW light rail station, and downtown Seattle. It is also just a 6-minute walk from a stop for routes 309, 330, 372, and 522. This proximity allows the residents of the Hillcourt Apartments to access a variety of locations throughout the area – Woodinville, Bothell, Kenmore, Lake Forest Park, Shoreline Community College, Wedgwood, Green Lake, the University of Washington, South Lake Union, First Hill, and downtown Seattle – all without the use of a car.
PUBLIC TRANSPORTATION - EXPANSION PROJECTS
Another option available to tenants is Sound Transit’s Link light rail transit system, which currently carries passengers to the University of Washington, downtown Seattle, the Seattle-Tacoma International Airport, and beyond. Numerous expansion projects in various stages of planning and development are in progress throughout the region, with a network of 108 total miles and 70 stations planned by 2041. The Northgate Link extension is currently in construction and is expected to open for service in September 2021. The Northgate Station, roughly three and a half miles away from the Hillcourt Apartments, is part of this expansion project, and will allow riders to travel to the Westlake station in downtown Seattle in just 14 minutes with service every 8 minutes, regardless of traffic conditions. Additionally, the Lynnwood Link Extension project, also currently under construction and scheduled for completion in 2024, will add four new stations including the Shoreline South station, less than 2 miles away. These expansion projects will connect residents of the Hillcourt Apartments to the Lynnwood Transit Center, the University of Washington, Capitol Hill, downtown Seattle, the Eastside, the Seattle Tacoma International Airport, and several other locales.
Seattle consistently ranks as one of the top employment cities in the nation. In April 2019, the Bureau of Labor Statistics’ jobs report indicated that the Puget Sound economy added almost 57,000 non-farm jobs over the 12-month period, and numbers released by the Downtown Seattle Association report that downtown Seattle’s employment increased by 39 percent from 2010 to 2018.
Several companies with a global presence including Amazon, Microsoft, and Boeing, all call the Puget Sound their home. Other nearby employers include Google, Facebook, the University of Washington, Expedia, Seattle Central College, Seattle University, the Fred Hutchinson Cancer Research Center, Tableau, Nordstrom’s headquarters, the Bill & Melinda Gates Foundation, numerous other South Lake Union and downtown Seattle employers, and multiple regional hospitals. Additionally, in June 2019, it was revealed that Apple is expected to move into 333 Dexter, a 630,000-square-foot development in South Lake Union. Using an industry standard ratio of 150 square feet per employee, this space would accommodate 4,200 employees.
Many of these world-renowned employers, most notably Google, Amazon, and Facebook, are experiencing tremendous growth in their Seattle locations.
NORTH SEATTLE COLLEGE
Occupying 65 acres along the western edge of I-5, North Seattle College (NSC) is located 4.1 miles from the Hillcourt Apartments. This school is one of the largest public community colleges in the Seattle area. It provides learning opportunities for a diverse group of approximately 7,000 students per quarter, many of whom go on to transfer to top universities across the country.
UNIVERSITY OF WASHINGTON
The University of Washington (the UW) is the largest university in the Northwest and one of the oldest universities on the West Coast. The university is considered a public Ivy institution, and its research budget is one of the largest in the country.
FUTURE EXPANSION - UNIVERSITY OF WASHINGTON
In December 2018, the Seattle City Council approved the UW’s impressive Campus Master Plan (CMP), which the school adopted for the purpose of accommodating anticipated enrollment growth and improving pedestrian and bicycle circulation throughout the four sections of campus.
GREEN LAKE PARK
At over 320 acres, Green Lake Park’s expanse of water and green space in the center of a dense urban neighborhood draws thousands of people from all over the city on a daily basis. The park also serves as a natural preserve for hundreds of species of trees and plants, as well as numerous birds and waterfowl.
Comprised of 1.1 million square feet and located 2.6 miles from the Hillcourt Apartments is the Northgate Mall.
FUTURE EXPANSION – NORTHGATE MALL
Northgate Mall is in the planning stages of a massive, phased redevelopment project aimed at reimagining the mall and transforming the area into a thriving, transit and pedestrian-oriented urban community.