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Global real estate investment company Kennedy Wilson (NYSE: KW) has acquired two wholly owned multifamily properties off market in Salt Lake City, Utah: Santa Fe Apartments, a 492-unit community in Cottonwood Heights for $79.5 million; and Creekview Apartments, an 88-unit community in Midvale for $13.0 million. The properties join KW’s multifamily portfolio focused on institutional quality garden-style apartment communities located near rapidly growing markets in the western United States.
KW invested $21.5 million of equity, including closing costs, in Santa Fe and secured a 10-year fixed-rate loan of $59.1 million at 3.9%. KW invested $4.8 million of equity, including closing costs, and secured an $8.6 million interest-only loan at L+1.6% for Creekview. The equity investments for both acquisitions use proceeds generated through a reverse 1031 exchange.
“With its dynamic economic climate, well-run state government and highly educated workforce, Salt Lake City consistently emerges as a compelling market for real estate investment,” said Shem Streeter, Managing Director at KW. “We continue to see strong interest from millennials and many other groups of renters in easily accessible suburban locations based on relative affordability and proximity to both high paying employers and outdoor recreation.”
Located just one mile apart, Santa Fe and Creekview both benefit from immediate access to the I-215 freeway, proximity to high-end grocers Whole Foods and Trader Joe’s, and easy access to neighboring retail centers with tenants including Walmart, Target and Bed, Bath & Beyond. Salt Lake City is widely considered the capital of industrial banking in the United States, home to prominent companies including Morgan Stanley, Goldman Sachs, Ally Bank and Target Bank. The region is also a part of the growing technology community referred to as “Silicon Slopes,” a combination of information technology, software development, hardware manufacturing and research firms.
Positioned on nearly 23 acres, Santa Fe offers both market rate and affordable units within one and two-bedroom layouts at an average 790 square feet. Creekview’s entirely market-rate offerings include both one and two-bedroom layouts at an average 850 square feet. Beginning immediately, KW plans to initiate its value-add asset management plan, including investing $5.3 million across both properties in interior unit renovations, upgrades to the fitness center, sport court, leasing center and other common area enhancements.
Santa Fe and Creekview add to KW’s growing multifamily presence in the Salt Lake City area, which now totals 1,396 multifamily units with a trailing 12-months NOI of $14 million, including Foothill Place and the Sandpiper Apartments.