Tri-City rental market stabilizes

By Kristi Pihl, Tri-City HeraldAugust 17, 2013 

The Lofts Construction

Workers swarm the construction site in Richland of the new apartment complex called The Lofts at Innovation Center. The new 160-unit complex is scheduled to open Sept. 1.

BOB BRAWDY — Tri-City Herald Buy Photo

The need for rental apartment housing in the Tri-Cities continues to put pressure on developers to satisfy that demand.

Fifteen new apartment projects in Kennewick, Pasco and Richland have added a total of 1,388 new rental units in the Tri-Cities since 2010, according to building permit data. And another 185 units are under construction.

Those projects, with an estimated value of $156.1 million, have resulted in a vacancy rate of 4.6 percent -- a definite improvement from the tight vacancy rate of 2 percent and less that made apartment hunting difficult for Tri-Citians in 2010 and 2011. The state average is 3.7 percent.

Developers aim for a 5 percent vacancy rate, which allows time for maintenance and repair, according to Glenn Crellin, associate director for research at the Runstad Center for Real Estate Studies at the University of Washington.

The stabilization of the Tri-City market should result in less pressure on rental prices, Crellin said. The average rent in March 2013 was $728, unchanged from a year ago.

Most of the new apartments -- 739 -- are in Richland, according to building permit data.

Another complex under construction is the Lofts at Innovation Center in north Richland. Weeks before the Sept. 1 move-in date, 14 of 40 new apartments in the first building are spoken for.

The developer, Innovation Center at Tri-Cities Research District, has already pulled the trigger on the second phase. The complex will have 160 apartments as soon as next summer.

Managing director Doug Perry said part of the reason for starting the second phase is some pending code changes that will make multi-family construction more expensive.

But there's a strong demand for the "urban chic" style of apartment living they offer, Perry said. They hope to attract both professionals and Washington State University Tri-Cities students to the complex, which is near both the school's campus and Pacific Northwest National Laboratory.

Rents start at $850 for one-bedroom and at $1,075 for two-bedroom apartments, according to the apartment complex website.

Pasco has issued permits for 234 new apartment units since 2010, valued at about $27.5 million, according to data provided by the city.

The largest of those complexes, in terms of rental units and value, is the Tierra Vida Condominium Apartments.

The complex is already full, with families waiting for the 13 units that are finished but not open yet, said Adan Suarez, managing director with CASA LLC, an affiliate of Prescott's Broetje Orchards.

There was already a waiting list when the first four buildings opened in December, Suarez said. About 50 percent of the families include Broetje Orchards employees. Rents range from $650 for a one-bedroom to $900 for a three-bedroom. But they offer a discount to families who volunteer their time in the community.

The apartments were built adjacent to an existing neighborhood of single-family homes called Tierra Vida. CASA hopes to see the apartment complex residents integrated into the Tierra Vida community. Roger Bairstow, chairman of CASA's board, said they are working on a plan for the homeowners to be able to access the recreation center.

Kennewick has issued permits for 410 rental units since 2010, valued at $20.5 million.

Edward Rose & Sons of Farmington Hills, Mich., is planning to add a 642-unit complex called Badger Canyon Apartments at 10251 Ridgeline Drive.

The developer is still working on getting utilities to the site, and hasn't yet applied for any building permits, according to data from the city.

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