September 3, 2021

263 apartments at Esterra Park in Redmond trade for almost $130M

Rendering by GGLO [enlarge]

The new apartments, along with the entire 28-acre development, are a short walk to the coming light rail station.

The Nightingale, a recently completed apartment project at Esterra Park in Redmond, has sold for nearly $129.6 million, according to King County records. The midrise building at 2651 156th Ave. N.E. is part of the larger 28-acre Esterra Park, developed by Capstone Partners and Lionstone Investments, which is a short walk to Overlake Village Station. Light rail service will begin there in 2023.

The seller was an LP associated with Canadian conglomerate Ledcor Group, which acquired the land for $8.7 million in 2018, then developed it. At the time of the land sale, for what was then called Block 10, Capstone said it was a partner in the new LP — but apparently a junior partner. Ledcor lists its partners as Qualico Developments and Lantower Residential. Documents recorded at the time of the land sale indicated that Ledcor would pay 10% of its future profits in the venture to the Esterra Park developers.

The buyer was SEA 156 NE 2020 LLC, which is associated with Acacia Capital. Public records indicate an $81.5 million loan from Athene Annuity & Life Co.

Brokers were not announced. The deal was worth about $492,740 per unit — an extremely high number, quite possibly a record for the Eastside, which reflects a premium for a brand-new building close to light rail, state Route 520 and Microsoft headquarters.

Developed on about 1.4 acres on the southeast corner of Esterra Park, the seven-story building has 263 units and 329 parking stalls on three levels — two underground and one structured. GGLO designed the Nightingale, and Ledcor acted as both developer and builder. The family-run firm, based in Vancouver, B.C., has its roots in road contracting and mining, but is now highly diversified. Esterra Park appears to have been its first and thus far only development project in our market; though it's been a contractor here since the 1990s.

Acacia likes Redmond. This June it paid nearly $98 million for Avalon Redmond Place, an older but well-located and well-maintained complex with 222 units near the Redmond Municipal Campus, and about a 20-minute walk southeast to the future Redmond Downtown Station. That deal was worth about $440,090 per unit.

The private investor has, during the past 30-odd years, owned or managed some 72,000 residential units that it values at $6 billion. Acacia is based in San Mateo, California, with a second office in Phoenix.

Nearing completion, with some other buildings under construction and others completed, Esterra Park will end up with around 2,600 apartments (some affordable), a hotel, daycare center, 3-acre central park, office building and retail/commercial space. Capstone values the project at around $1.2 billion. Capstone acquired the former Group Health campus in 2013 for $32.5 million. CollinsWoerman did the master plan.

Others active at Esterra Park have included AvalonBay Communities, LPC West, Imagine Housing and CSM Corp. of Minneapolis.