Investment Overview

The McIlvaine Apartments is a beautifully preserved eight-unit historic apartment community located in Tacoma's rapidly evolving Hilltop neighborhood. Originally constructed in 1912, this charming wood-frame building showcases timeless architectural character that continues to resonate with today's renters. The asset received its historic designation in 2018 and was added to the Tacoma Register of Historic Places after current ownership performed substantial rehabilitation which exceeded $240,000. The 10-year designation, which began in 2019 and can be extended, grants the property a special tax exemption, which lowers the taxable value by nearly $210,000. Giving a new owner continued savings on operating costs for several years. The property features an attractive unit mix of spacious one- and two-bedroom apartments ranging from approximately 850 to 1,000 square feet. Each residence highlights the craftsmanship of the early 20th century with original crown molding, hardwood flooring, built-in cabinetry, solid wood doors, arched passageways, and elegant columns. While preserving its historic appeal, ownership has thoughtfully modernized the interiors with contemporary finishes, including white shaker cabinetry, quartz countertops, stainless steel appliances, dishwashers, and in-unit washers and dryers, creating a highly desirable blend of historic charm and modern convenience. Top floor units additionally feature a small office study room with beautiful regional views that include Mt. Rainier, further appealing to today’s modern work from home tenants. In addition to the interior renovations, ownership has invested substantially in the property's infrastructure. Capital improvements include a new TPO roof in 2018, largely updated copper electrical wiring, modern electrical panels, and significant replacement of the building's plumbing with copper and PEX piping, reducing future capital expenditure requirements while enhancing long-term operational reliability. The property's exceptional character, spacious floor plans, and quality renovations position it to command premium rental rates relative to competing assets in the surrounding market, attracting a stable, high-quality tenant base. Offered at an attractive going-in capitalization rate exceeding 6.6%, the investment provides immediate cash flow while maintaining meaningful upside potential. As existing leases naturally roll to market, an investor has the opportunity to capture additional rental revenue and implement ancillary income strategies, resulting in an estimated increase in annual gross income of approximately 12.5%. Further enhancing the investment opportunity, the offering includes two separate parcels, one of which consists of approximately 5,444 square feet of vacant land. Zoned RCX (Residential Commercial Mixed-Use), the site presents significant long-term redevelopment potential, allowing for a variety of future uses including medium- to high-density residential development, townhomes, condominiums, apartments, or mixed-use projects incorporating neighborhood-serving retail or office space. This excess land provides investors with both near-term flexibility and a valuable long-term development option, creating an opportunity rarely found in stabilized multifamily investments.