Despite the challenging negotiations, we successfully closed the deal, and Tamarack will be focusing on an improvement strategy in the coming months.
Tamarack Capital has finalized the purchase of Highland Apartments, our new 30-unit apartment in Clarkston, WA! After three months of tough negotiations, we purchased this property at a 12% discount from the appraised value. This is the second apartment in our Strider 1 offering, alongside Latah Apartments in Pullman, WA which is already exceeding our underwriting assumptions.
We navigated difficult negotiations to get this deal closed. The insurance market is in chaos this year as insurance providers are dealing with excess losses from wildfires, water damage from frozen lines, and an unfavorable legislative environment. All of this has resulted in insurance companies raising rates on new policies or ceasing to write new policies. In order to achieve our investment return targets, we negotiated an additional seller credit of $125k which will be used to replace all electrical panels and interior water lines. In the eyes of our insurance company, our apartment will be considered a brand-new build!
In the end, we closed with a purchase price of $3.125M and the property has already appraised at $3.55M. Next steps are for Tamarack Capital to execute our value-add improvement strategy over the next 18 months.
