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The Evolution of Tenants

The Evolution of Tenants
Security Properties' one-year-old multifamily fund recently closed on two major buys: the 59-unit 700 Broadway on Capitol Hill and Newport Crossing, a 192-unit complex in Newcastle. Price tag:$50.6M for the pair. (And you thought you splurged on your birthday.)
The Evolution of Tenants
The acquisitions play into Security's strategy of targeted investments in likeable neighborhoods with excellent access to mass transit. As Ed McGovern, managing director for capital markets, puts it, "Sites with superior access to transit, amenities, and employers are paramount, and not all prime sites are in the CBD." We caught up with Ed and Security Properties COO Tim Overland this week to talk tactics. Security is not trying to reinvent the wheel, Ed says, though it does strive to evolve with tenants. For one thing, there's the new hunger for wireless: "Telling them there's no wireless in a building is like telling them there's no plumbing," he says. (In our opinion, worse.)
700 Broadway on Capitol Hill, recently acquired by Security Properties.
This generation of renters also likely rented during the recession, which means they've gotten comfy with the condo-like feel, colloquially called "luxury apartments." A grocery store or coffee shop on the bottom floor of a building is also a plus. (Obviously, this is also the generation that grew up watching Friends. Good luck when the Glee children start renting.)
Incorporating art, like this masterpiece of a gate below at Security's On the Park development in Ballard, is also important to the company, Tim says. And Security is busy flexing its development muscles, planning to break ground on a new project in Columbia City early next year and moving forward with plans to create a 190-unit complex in the U-District in conjunction with Seattle Children's Hospital and the UW. "We think there are opportunities in the U-District," Tim says. "The area has transit and some great amenities. We expect population increases to come from a much broader, more diverse residential base."
The Evolution of Tenants
Tim and Ed know something about good digs: Security's offices have occupied the 54th floor of 1201 3rd Avenue for the past dozen years, and it's hard to find a better view of the city. Security, which owns 128 properties in 30 states, is shifting its focus to the western part of the US. While some eastern financiers once thought of Seattle as northwest Alaska, "Alaska should be seen as northwest Seattle," Tim tells us. Evolution, indeed.