Tacoma is the third largest city in Washington, and its downtown and CBD have experienced a rebirth which has served as a magnet for new residents. Most specifically, the younger renters are drawn to the city’s affordable rents and lower cost of living as well as its proximity to downtown Seattle. In 2020, Tacoma apartment applications submitted by Gen Zers increased 40 percent, according to RentCafé.

With this demand in mind, a $20.9 million loan was recently provided for the construction of an eight-story 115-unit multifamily building in Tacoma. The sponsor is a single-purpose entity formed by three local investors with an existing portfolio of six multifamily assets, and a proven development and ownership track record in the Pacific Northwest.

The shovel-ready project located at 1351 Fawcett Ave. will feature a mix of floorplans ranging from micro to three-bedroom apartment homes. Interior amenities will include quartz countertops, stainless-steel appliances, and washers and dryers in larger units. Common area amenities include a rooftop deck adjacent to a community room.

This pent-up demand for rental housing is expected to last for the next five years as the population continues to grow, says Jonathan Daniel, principal of Knighthead Funding LLC. Knighthead provided the financing.

“The Seattle MSA is similar to other major markets around the United States in which renters are being priced out of some of the core urban locations and seek more affordable submarkets,” said Daniel. “Tacoma is benefiting from that trend as we see a robust demand for well-maintained well-operated rental communities.”