Puget Sound Business Journal: Pine Street Townhomes Purchase
April 17, 2023
Pine Street Townhomes, a 53-unit complex near Tacoma Mall, sold on Thursday for $17 million to Portland-based Ethos Development and San Francisco-based Lombard Equities Group.
Though the sale of the property at 2901 S. 45th St. wasn’t large by local standards, it’s notable for its increasing rarity.
Multifamily sales have been unusually slow this year amid higher interest rates and the tighter credit environment. The Pine Street Townhomes sale is one of only a handful of multifamily transactions to have taken place in the Puget Sound area this year.
In its announcement of the deal, Lombard managing member Arie van Gemeren said the multifamily investor partnered with Ethos to acquire the property “at a great purchase price versus replacement value (70% of replacement value), and with substantial upside on rental renovations and turnovers.”
According to a report by Kidder Mathews’ Dylan Simon, there were only 15 apartment sales in the Puget Sound area greater than $1 million in the first quarter of 2023. That’s significantly lower than the region’s five-year first quarter average of 57.
Most transactions are taking place between private buyers and sellers, according to Simon’s report. In the first quarter of 2023, 66% of the transactions involved private parties. There were no foreign entities or real estate investment trusts that participated in multifamily transactions in the Puget Sound area in the first quarter of 2023.
The seller of Pine Street Townhomes was Kaz Enterprises, a San Diego-based multifamily investor that focuses on Pacific Northwest developments.
Pine Street Townhomes was built in 2008 and last changed hands in 2018 for $10 million.
Meritus Property Group, which is part of Ethos Cos., will manage the units.
Ethos broke into the South Sound market two years ago with the development of the 115-unit Analog Apartments at 411 S. 15th St. in downtown Tacoma. Ethos recently completed the Analog and is now finishing its second ground-up multifamily development in the Tacoma area, the 160-unit Moraine at 1402 Tacoma Ave.