Multi-Family and New Multi-Family Development Presented by Arthur “Wes” Larson Principal, CEO
About Sound West Group Founded in 2010; principals began investing together in Puget Sound area real estate in 2004 We are a fully diversified real estate company active in acquisition, development, construction (via affiliate FPH Construction), management and brokerage (Sound West Realty Advisors: Commercial Brokerage; Sound West Real Estate: Residential brokerage)
Sound West Group – Our Focus Our Focus: Multifamily and single family housing- $70 million under construction: 167 apartment units and 128 single family homes under construction 200+ units under development Also: Medical Office and National Credit Retail
Silverdale Bennie’s Barn, formerly Guilford Feed & Seed, now Farmland on Highway 21 (Silverdale Way) & Byron Street.
Larson Farm
Kitsap Mall Larson Farm was located where movie theater is presently
Spyglass Hill Apartments
Spyglass Hill Apartments
4 th Street Redevelopment
4 th Street Redevelopment
Poulsbo Place Apartments
Poulsbo Place Apartments
A.W. Larson Building
A.W. Larson Building
MULTI FAMILY HOUSING TRENDS “RENTER NATION” Percentage of New Household formation by Renters vs. Home owners is at a low not seen since 1962. 62% Home owners 38% Renters
MULTI FAMILY HOUSING TRENDS Household creation will peak in the 25 to 34 age bracket in next 5 years Millennial Generation: Change in “rent” vs. “own” mentality. More disposable income but desire for portability of lifestyle (decline in confidence in housing market) Lending regulations have tightened (Dodd Frank Act) Lack of affordability in condo market
PUGET SOUND REGION 2014: New Units: 8,919 New Renter Households: 8,632 New Jobs: 56,000 (est. 1 new rental household for each 7 new jo 2015: New Units: 12,000 New Jobs: 51,000 2016: 11,000 2017-19: est. 20,000 Question is how many of the Units will actually be built? Current Vacancy Rate: 3.4% vs. Historical Rate of 5.0% Source: Dupree & Scott Apartment Analysis, Vol. 38 No.2, June, 2015 SEATTLE RENTS TRENDING TOWARD $2.75 TO $3.75 PLUS PSF
KITSAP COUNTY 2015: Kitsap County: est. 105,000 housing units Total Rental Units: 30,000 - 35,000 New Units: 75 - 100 possible New Jobs: 2,400 Est. New Rental Households: 342 - Given in migration of commuters from Seattle and conversion of single family rental home stock and a potential overall structural shift toward Renting vs. Owning to “for sale” product this number is likely understated. RENTS AT 1.25 TO 1.50 PSF AND TRENDING TOWARD $1.75 TO $2.00 PSF
Kitsap County Vacancy Rates JUNE 2015 - VACANCY SURVEY (O'CONNOR GROUP) Total Bainbridge Bremerton Port Orchard Poulsbo Silverdale 6121 Total Units Surveyed 303 2690 1147 389 1592 39 Total Vacant 3 25 4 1 5 0.6% Vacancy Rate 1.0% 0.9% 0.3% 0.3% 0.3%
CHALLENGES Achieving Sufficient Rent To Provide Adequate Return On Investment Over Building Demand Regulatory Environment
OPPORTUNITY IN KITSAP MULTI FAMILY Lower Cost Of Land Vs. King County Strong Demand And Lack Of Supply Build Efficiently Designed, “Hip” Units With Amenities, In “In Close” Urban Locations, (Near Ferries And Jobs) Lack Of Modern Units/Existing Stock Is Comprised Mostly Of Older, Garden Style Units, Or Older Single Family Homes Take Advantage Of Financing Tools Improved Regional Connectivity Via Water Transportation Return Of The “Mosquito Fleet” (Better Connectivity By Fast Ferry)?
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