Overview

Located in the heart of Seattle’s highly desirable Queen Anne neighborhood, on top of the hill and just blocks from the vibrant commercial corridor of Queen Anne Avenue N, Kerry Gardens is a charming, 1910-vintage classic brick-veneer apartment building.

Kerry Gardens has already undergone major systems updates including tuck pointing, plumbing, electrical/heating, double-pane vinyl windows, and a new torch down roof, and has the potential for the addition of a 12th unit.** While the systems have been updated, the opportunity remains for the buyer to update unit cosmetics to achieve market rents. Beyond its amenity-rich location, blocks to Queen Anne Avenue’s bustling retail scene, Kerry Gardens is situated on a tree-lined street in a high-end neighborhood of single-family homes and condominiums. Its prime placement offers both the lively entertainment and the quiet residential atmosphere that the current cohort of tenants demand.

Residents of Kerry Gardens are advantageously located within blocks of two thriving, walkable retail hubs: Upper Queen Anne Avenue is just four blocks to the west, and Lower Queen Anne is seven blocks to the south. Further, this prime location provides quick and easy access to both Downtown Seattle and South Lake Union, two major regional employment centers. Kerry Gardens is also within two miles of a variety of prominent employers including Amazon’s ever-growing world headquarters, the Bill & Melinda Gates Foundation, Seattle Pacific University, the rapidly expanding Google and Facebook campuses, and a variety of biotech companies scattered throughout South Lake Union. Additionally, the new Expedia campus (1.5 miles away) will open in 2019 and is expected to accommodate 4,500 new employees. Likewise, in June 2019 it was reported that Apple is planning to occupy South Lake Union’s 333 Dexter, a 630,000-square-foot office building that would accommodate up to 4,200 workers based on industry standard space ratios.

With a “very walkable” Walk Score of 88 out of 100, Kerry Gardens is within a half mile radius of more than 40 food and drink establishments as well as a number of major grocers such as QFC, Trader Joe’s, Metropolitan Market, Safeway, and the Queen Anne Farmers Market. It is also within a half mile of 10 parks, playfields, and open spaces. Residents of Kerry Gardens have numerous entertainment options in their immediate vicinity including the Seattle Children’s Museum, the Museum of Pop Culture, the Pacific Science Center, Chihuly Garden and Glass, and Seattle Center’s theaters, gardens, fountains, and museums – all less than a mile away. Additionally, within a half mile, there are stops for five bus lines that take tenants to Downtown Seattle, Seattle Center, and Seattle Pacific University. With walkable access to such a vast array of dining, entertainment, employment, and transit options, residents of Kerry Gardens can conduct their lives without the need for personally owned vehicles. This European-style, car-free existence is the preferred lifestyle for the current generation of renters.

Property Overview

Address 1421 2nd Avenue N
Seattle, WA 98109
No. of Units 11
NRSF* ±8,670
Year Built 1910
Price $3,875,000
Price / Unit $352,273
Price / SF* $446.94
Current Cap Rate 4.2%
Market Cap Rate 4.6%
Current GRM 16.2
Market GRM 15.2
Lot Size 8,500 SF
Zoning L1 (M)
Parking 6 spaces

*Based on Seller’s square footage estimates

Investment Highlights

PRIME, top-of-the-hill Queen Anne location near prominent employers in South Lake Union and Downtown Seattle
LIKELY potential for upside in the form of higher rents with cosmetic upgrades and the addition of a 12th unit (buyer to verify)
MANY major systems updates have already been completed: tuck pointing, plumbing, electrical/heating, and double-pane vinyl windows, and a new torch down roof within the last year
WALK SCORE of 88: Easy walking distance to an abundance of dining and shopping options in two popular retail hubs: Upper Queen Anne Avenue (4 blocks from property) and Lower Queen Anne (7 blocks from property)
ATTRACTIVE property features including parking, wide interior corridors, a common laundry/storage room, spacious living areas, 9ft ceilings, breakfast bars or dining areas, ample in-unit storage, and charming vintage aesthetics

Some of Kerry Gardens’ period charm is showcased in its attractive symmetrical brick veneer exterior and original 5-panel interior doors and hardware. The property’s 11 corner units are comprised of 6 one-bedroom and 5 two-bedroom apartments, each exhibiting spacious living areas and hallways, 9-foot ceilings, breakfast bars or dining areas, multiple closets, three-inch decorative molding, an abundance of natural light from large dual-pane vinyl windows, and individual hot water tanks. Select units offer a variety of desirable attributes including dishwashers, bay-type windows, and oak flooring. Property features include electric baseboard heat, generously sized interior halls, attractive and easily maintained landscaping, storage space for six bicycles, and a common laundry facility. There are also six oversized parking spaces available for tenant use, which will likely accommodate 8 cars if re-striped.

A new operator will greatly benefit from the previous owner’s improvement efforts, as a majority of the more invasive and expensive upgrades and repairs have already been completed. The building was fully tuck-pointed in the past ±20 years, a new torch down roof was installed within the last year, the electrical system has been updated and recently inspected by the City of Seattle, and the plumbing system has been completely redone with copper piping throughout, except for the exterior hose bib. With nearly all of the more cumbersome updates already concluded, new ownership will be able to focus on projects that will likely result in substantial rental upside, such as basic cosmetic upgrades – installing new kitchen cabinets and countertops, and updating flooring as needed – or a more robust renovation that includes the addition of in-unit washer/dryers. For even higher returns, a 12th unit can potentially be added in the space currently occupied by laundry and storage. **

Kerry Gardens, with its world-class, top-of-the-hill Queen Anne location, is well-suited for an investor with a value-add strategy including cosmetic updates and increasing rents to market. This property’s excellent location and potential for rental upside, combined with its major systems updates, ample parking, and likely opportunity to add an additional unit,** makes Kerry Gardens an attractive asset with excellent long-term potential.

**Buyer to verify

Property Details

Basement Plan

First Floor Plan

Nearby

Location

Kerry Gardens is situated on Queen Anne Hill, one of Seattle’s most desirable neighborhoods. Specifically, Kerry Gardens is located on top of the hill on a quiet, tree-lined street, and Queen Anne Avenue’s trendy retail corridor is just a few blocks to the west while Mercer Street’s walkable restaurants, retail, and grocery options are approximately three quarters of a mile to the south. This area appeals to young professionals who value a central-living situation that offers convenient access to a multitude of employment opportunities and all sorts of walkable retail options. Further, both the South Lake Union and Downtown Seattle neighborhoods, with their vast dining, entertainment, and employment options, are roughly a mile away and are easily accessed via public transportation.

88

Walk Score

73

Bike Score

73

Transit Score

Nearby Amenities

Queen Anne

Immediately northwest of Downtown Seattle, Queen Anne sits atop the highest hill in the city, offering sweeping vistas of Seattle’s skyline, the Space Needle, Mount Rainier, and Puget Sound. The neighborhood provides excellent walkability and public transportation, popular Seattle restaurants and boutiques, and close proximity to multiple Fortune 500 companies.

Queen Anne has become one of the most highly sought-after neighborhoods in the Puget Sound. It is considered a neighborhood of choice for those who work in Downtown Seattle and want to be centrally located in the city.

In addition to having one of the lowest crime rates in the city, Queen Anne’s old-world charm, boutiques, restaurants, and nightlife also make this neighborhood an ideal place to live.

The neighborhood’s main thoroughfare, Queen Anne Avenue, links the area with Downtown environs and has become a magnet for trendy restaurants, upscale hotels, and popular bistros. Just about every type of restaurant can be found on Queen Anne Avenue North, or in Lower Queen Anne, at the base of the hill.

Drive Times

Downtown Seattle

15 min

Highway 99

6 min

Seattle Center

5 min

Kerry Park

3 min

Interstate 5

9 min

Highway 520

15 min

Transportation

Seattle is in the midst of an urban revitalization that has seen many exciting transportation projects. This activity includes the Alaska Viaduct project, the Mercer Corridor project, the Dexter Avenue project, the Light Rail expansion, and the potential Seattle Streetcar expansion. These improvements to Seattle’s infrastructure will better connect the city’s neighborhoods, provide easy access to major employment hubs, ease traffic, promote mass-transit, and create pedestrian-friendly arterials with wider sidewalks and bike lanes.

Employment

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. The Downtown Seattle Business Core currently employs more than a quarter million people, and numbers released by the Downtown Seattle Association report that downtown Seattle’s employment increased by 39% 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, 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 reported 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 up to 4,200 employees.

Many of these world-renowned employers, most notably Facebook, Google, and Amazon, are experiencing tremendous growth in their Seattle locations.

Due Diligence

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