Parkside Esterra Park, a 664-unit apartment property near Microsoft’s Redmond headquarters, recently sold for $286 million, marking the largest sale of its kind in the Seattle region since February 2022. This transaction not only sets a new price record but also highlights a growing optimism in greater Seattle’s multifamily market, which is making a steady recovery after the disruptions caused by the COVID-19 pandemic.
Despite multifamily investment sales in the region still lagging behind historical averages—impacted by high borrowing costs and declining property values—there are clear signs of revitalization. Increasing leasing demand and slowing construction are driving rent growth, attracting cautious investors back into the market. In fact, apartment sales in the Puget Sound area totaled $2.3 billion in the first three quarters of 2024, up from $1.7 billion in the same period last year. This uptick mirrors a national recovery in the apartment sector, fueled by slowing inflation, improved consumer confidence, and a diminished threat of recession.
Seattle’s apartment vacancy rate remains steady at just under 7%, outperforming the national average of 8%, even with the completion of a record 14,000 new apartment units last year. Rental rates have seen a nearly 2% increase, averaging $2,040 per month in the Puget Sound region, making Seattle one of the most expensive areas in North America for renters.
Prominent players in the multifamily space, such as Essex Property Trust, are reporting strong performance. In fact, almost 18% of the company’s revenue in Q3 came from its Seattle portfolio, with a nearly 4% year-over-year rent growth on new and renewed leases. Essex’s performance further underscores Seattle’s position as a standout market, demonstrating its resilience and potential for sustained growth.
Recent high-profile sales, including Goldman Sachs’ $174 million purchase of the Skyglass tower and Lakevision Capital West’s $286 million acquisition of Parkside Esterra Park, underscore renewed investor interest in greater Seattle’s multifamily market. These deals reflect a shift toward a more balanced market, with rising occupancy rates, slowing construction, and increasing renter demand.
Experts note that property values, which have been in decline over the past year, have likely hit bottom. As the market stabilizes, the expectation is that property prices will begin to rise. With fewer new developments breaking ground, analysts predict continued rent growth and growing investor confidence in the years ahead, positioning greater Seattle for a robust multifamily market recovery.
This post was based on information found on CoStar.
