Investment Overview

The Pacific Northwest Investment Sales Team of IPA has been retained as the exclusive listing broker for the sale of Notch 8 apartments, a multifamily community located in Tacoma, Washington. Notch8 offers excellent access to Interstate 5, providing convenient connections to some of the South Puget Sound’s largest employers. Built in 1986, this well-maintained asset features units ideally suited for upgrades, presenting a value-add opportunity for an incoming investor.

Community Summary and Amenities

Notch8 consists of three-story walkup buildings and features a refreshingly bright and cozy resident clubhouse with a leasing office and lounge area for the use of residents, complete with a pool table, shuffleboard, full-size kitchen, and TV area. The lounge area connects to a resident gym that is fully equipped with top-of-the-line cardio equipment, free weights, and a cable machine. The gym features a large roll-up garage door that opens out onto the pool deck allowing residents to enjoy an indoor-outdoor experience in the summer months. The pool area is open from Memorial Day to Labor Day and is a great place to residents to relax and enjoy the pleasant weather. The property also features a playground for children, as well as a quiet landscaped courtyard perfect for walking pets.

There are seven residential buildings at Notch8 totaling 126 units plus the clubhouse for a total of eight buildings on the property. The community was built in 1986 and offers a mix of one- and two-bedroom apartment homes averaging ±765 square feet. The unit interiors have not received any upgrades in a decade, and feature sheet vinyl in the wet areas, carpet in the living rooms and bedrooms, older faux stainless-steel appliances with coil cooktops, spray counters, white cabinet faces, fireplaces, and decks or patios depending on the floor. All units come equipped with a washer and dryer.

CAP Rate: 7.21%

Notch8 presents the opportunity to acquire an asset that is operating very well and one that will cashflow substantially even at current interest rate levels. Buyers can improve operations to increase cap rate further, well above 8%, based on market rent comps and conservative market expenses.

Great Basis: $139k / Unit

The asset can be purchased at a basis that is roughly 60% what it would cost to replicate today, and more than 30% less than what similar properties in the area have traded for recently. This very attractive basis protects downside and leaves plenty of room to profitably exit in the future.

Well-Designed, Livable Floor Plans

Notch8 offers a diverse mix of one-, and two-bedroom homes with an average size of ±765 square feet, featuring functional layouts that appeal to a broad tenant base.

Excellent Connectivity with Immediate Access to I-5

The asset is located less than 5 minutes away from on-ramps to I-5 Northbound and Southbound, offering residents easy commuter access to major employment centers in Tacoma, Seattle, Bellevue, the Kent Valley, and Olympia.

Proximity to Port of Tacoma Expansion

The property is well positioned to benefit from the current expansion of the Port of Tacoma, which is investing significantly in infrastructure to accommodate larger vessels and further solidify its role as a premier West Coast port. The Port currently handles more container volume than the Port of Seattle.