Investment Overview

The Salmon Creek Apartments is located in Sumner, a city of approximately 10,600 residents (according to the 2020 census) in Pierce County. Even with a steady increase in growth over the past decade, that rapidly expanded during the COVID pandemic, Sumner has preserved its small-town charm, which has attracted a much younger population with a median age of only 35 years. Sumner is located at the meeting points of Highways 512, 167, and 410, which gives residence an ease of access to major employment centers all over Pierce and South King County. Along with major vehicle transportation routes, the Sumner Train Station is less than a mile and a half from Salmon Creek, which provides public transportation access throughout the Puget Sound. The Salmon Creek Apartments not only offers an investor the chance to acquire a high-end renovated asset in a stellar submarket, but the asset is also being offered with assumable debt, that will give an investor the opportunity to obtain an interest rate that is no longer available in today’s market. The current ownership refinanced the property in December of 2019 with a 10-year fixed Freddie Mac Small Balance Loan. The loan has an attractive interest rate of 4.38% (approximately 150 bps lower than today’s standard rates), fixed until the maturity of the loan on 1/1/2030, monthly payments of $6,909.19, and a balance of $1,307,968 in April of 2023. Even though Salmon Creek offers an investor a fully turn-key asset, the current ownership group has been able to obtain substantial rental increases on leases which have recently turned, that when implemented across the board, offer additional upside in cash flow and value. Currently, rents are an estimated $73 below market. Once simply raising all rents to market, the buyer will achieve a stabilized cap rate of approximately 5.76%.