The 58-unit townhome complex known as The 27 Elm in Redmond sold for $13,200,000 ($227,586/unit) after a nearly two-year-long buildout and full stabilization. Brokers Dan Kemp, CCIM, Pat Kesgard, CCIM and Kristie Schmitt represented the seller, Chicago-based developer The Renaissance Companies and its local affiliate, Hunter Renaissance Development (HRD). HRD owners Jeanmarie Kapp and Nancy Kapp wanted to provide a higher quality of living for those in the medium income range, something they did not see already existing in Central Oregon.
“Every one of our properties is different from its neighbor,” said Jeanmarie Kapp. “Our prototype includes opportunity zone projects and those cities/towns having difficulty addressing their workforce housing needs. Each project we take on is a catalyst for growth – in design/style, livability and economics. Our focal point is to provide a superior living product for middle-income America, a vastly underserved market across the US.”
Located on the corner of NW Elm Avenue and 27th Street, this workforce housing community contains 59 tax lots on 2.76 acres. Construction took place in a two-phase process. The first phase completed 36 units in summer 2018. Twelve months later, phase two delivered 22 units, and the property was fully stabilized by November 2019.
The 27 Elm went under contract several times in early 2020 until FAC Redmond LLC, a syndication led by Davis Vaughn, purchased the property. Vaughn previously worked with Security Properties, which purchased the Outlook at Pilot Butte apartments and the Aspen at Farmington Reserve, making this the third-largest multifamily investment property that he has been involved with in Central Oregon.
“Multifamily Interest rates dropped significantly in the last few months, which created additional positive leverage and increased the returns for this investment,” Kemp stated.
The new townhomes created and continue to create high demand with over 1,500 leasing inquires during construction and pre-leasing. A study of the tenant base shows a large sector of the tenants coming from across the western United States to take new jobs in Central Oregon.
Kemp stated, “Redmond has been starving for new, upscale, yet still affordable multifamily housing and the leasing demand for The 27 Elm has set a new bar.”
So, what comes next for the developers of the successful townhomes? They are currently in an equity raise for their up-and-coming 21 Canal project. Entitlements are complete, construction and permanent financing are set, and they are ready for permits. This project is a similar workforce housing campus with expanded amenities including a tenant-desired fenced dog park, attached garages and fenced yards, with a mixture of one-bedroom apartments and townhomes totaling 130 units. Additionally, the development is in an opportunity zone, which brings tax benefits.
