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Bellingham Apartment Buildings for Sale

The market for apartment buildings for sale and multi-family properties in Bellingham is very consistent with steadily increasing rents and low vacancy rates in the 2% and less range. Historic cap rates have fluctuated with interest rates as they do in all markets, however the market cap rates tend to adjust slowly. The overall inventory for multi-family properties in Bellingham has experienced periods of growth. Most recently the student housing sector has seen increases in inventory with a couple of major projects.

30 Unit Apartment Building – $3,300,000

True 6.25% Cap – Echo Flats West was built in 1981 but received a major renovation converting the property into a 30 unit apartment building with 16 ground floor studios, 12 loft one bedrooms, and 2 huge two bedroom units w/ loft with 36 parking spaces plus cell tower lease. Centrally located near Starbucks, Fred Meyer, the new Costco with more commercial development to come. Great looking property with zero vacancy.

Complete Offering Memorandum

Disclaimer: The information contained in this listing has not been verified by Windermere Real Estate/Whatcom, Inc. DBA North Sound Commercial and should be verified by the buyer.

What Are the Different Types of Apartment Buildings in Bellingham?

We have already mentioned student housing in Bellingham. Being home to Western Washington University, Bellingham has always experienced a strong student population that makes up a primary sector of the multi-family inventory, but there are other types of multi-family housing within the city. There are micro apartment buildings that are sometimes referred to as SEDUs (Small Efficiency Dwelling Units), LIHTC (Low Income Housing Tax Credit) apartment buildings, market rate housing properties, downtown apartment buildings, and mixed-use properties that typically feature apartment units over street retail space.

What is the current Vacancy Rate in Bellingham WA?

The current vacancy rates for apartment buildings in Bellingham is 1.01%. The vacancy rate has remained below 2% for the last 5 years and counting. Whatcom County posts a total vacancy rate of 1.8%, which has also remained low for several years. As this is an average, the vacancy rate for highly desirable locations such as WWU campus are much lower than 1.01%. The continued low vacancy rate has consistently put pressure on rising rents even through the increase in inventory. There appears to still be a high level of absorption in the Bellingham multi-family market.

Bellingham Apartment Building Permit Activity

The City of Bellingham permit center lists the number of multi-family units permitted by year and provides monthly updates through out the year. Contact us for the latest statistics as we only update the stats below annually. In review of the current building activity for multi-family housing, over the last 5 years the average number of units added to the market in Bellingham is 412. The current population of Bellingham is calculated at 89,045 in 2017 with annual population growth about 2.5%, which equates to a net gain of 2,000 people every year. How many houses are being added to the market? Over the last 5 years the average has been 166 homes annually. This means that the total housing supply in Bellingham is growing at a rate below the population growth.

Western Washington University (WWU) Apartment Buildings

Student housing is a popular asset class for multi-family investors. Bellingham WA is a popular market for small to mid-sized student housing investors. Bellingham is home to WWU, which had a 2017 student enrollment of 15,915. While WWU does offer on campus housing options, they are limited with room for only 3,975 students. That leaves nearly 12,000 students looking for off campus housing options. These 12,000 students and their non-studious friends rent homes and apartments around the WWU campus. One of the more popular locations for students in Happy Valley, the area just south of campus. For building owners and developers, the zoning just south of campus to Knox St is primarily zoned for 1 unit per 1,000 square foot of land volume. The multi-family zoning code does not discriminate based on unit size or number of bedrooms, so the sites can be maximized by adding units up to 4 bedrooms. The parking requirements are typically the main restriction on how many units can be efficiently building in this area. To date, most of apartment buildings in this area are surface parked. As rents continue to rise and underground parking becomes more cost effective, we believe we will see a shift in this trend.

SEDUs and Micro Unit Apartment Buildings

With the rising rents in urban areas, we have seen SEDUs (also known as micro unit apartments) grow in popularity. SEDUs or small efficiency dwelling units became popular regionally in Seattle and have recently spread throughout the area. Initially there was a lot of public resistance in micro housing, but as rents continue to rise, they have certainly filled a gap in the housing market. In Bellingham, there have been a few micro unit apartment buildings constructed and there are several developers that are currently in the planning phase to build more. The typical size of the SEDUs are between 300 square feet and 500 square feet. They are small studio apartments with a separate bathroom. It is common to use a murphy style bed and stack or combo washer/dryers in these units. It is likely that micro housing will continue to be a trend as we move forward in adjusting to rising housing costs.

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