LA developer seeks more Tacoma sites after new apartments fill quickly
This post was written by Shawna De La Rosa and originally published on 5/24/2022 on Puget Sound Business Journal
The recently completed Hailey apartments in downtown Tacoma is leasing up fast, and its early success has its developer looking for other opportunities in the city’s downtown core.
“We are extremely pleased to have 50% of the property leased within the first five months,” Alla Sorochinsky, chief financial officer of Los Angeles-based Cypress Equity Investments, said Tuesday. “We’ve had a great response. We would love to do more developments in Tacoma.”
Hailey’s 186 units at 1210 Tacoma Ave. S. are among the first of thousands that will be opening in downtown Tacoma in the next two years. The demographics of its renters paint a picture of who may be looking for housing in Tacoma as more apartment units deliver.
So far, 70% of the Hailey’s tenants come from within the greater Tacoma area and many work in the health care field for employers such as St. Joseph Medical Center, MultiCare Tacoma General Hospital and Virginia Mason Franciscan Health.
Sorochinsky said Tacoma is similar to other suburban markets around the country, where people are leaving larger cities in search of more bang for their buck.
“What I am seeing is people moving out of crowds and higher rents into suburban areas that offer jobs and a better lifestyle,” she said. “I’m seeing that in the suburbs of Dallas, Denver, South Florida and Atlanta. People are following jobs that are being created in areas with more reasonable costs of living.”
To meed demand, Cypress has been opening offices in smaller markets, such as Aspen, Colorado.
“We are trying to create first-class living in a suburban environment,” she said.
But not just any suburban environment.
“It has to check all the boxes,” she said. “And Tacoma does that. It has to have employers and be transit-oriented. That is extremely important.”
She said Tacoma’s 2.4 mile Link light rail expansion plan factored into the company’s decision to seek more opportunities in Tacoma.
Sorochinsky feels the city could use more downtown retail, jobs and entertainment options.
“We’d like to see more walkable zones where residents can live, work and shop,” she said. “But retail typically follows housing.”
Apartment units in the seven-story Hailey rent at market rate. The project received from the city and eight-year multifamily tax exemption, designed to encourage multifamily housing development.
Studio19 Architects designed the building and Rush Commercial of Gig Harbor was the general contractor.
The development was initially launched by Vietnamese company HQC USA LLC in 2017. The city of Tacoma transferred the $750,000 property, a former parking lot, via a quit claim deed to HQC, according to public records. The project hit a snag and sat idle for several months in 2018 and 2019 when HQC had to refocus its resources on its home country.