A 15-story apartment building in the Stadium District is getting a multimillion-dollar makeover and is set to help meet a growing demand for housing.
Many of the common areas for the Orion Apartments, formerly Commencement Terrace, have been remodeled. The on-site laundry center now has washers and dryers that residents can reserve with a phone app. When the cycle finishes, the appliance will notify them, said property manager Kathlyn Muller.
The 168-unit structure’s amenities include a small theater room, a fitness center, a yoga room, barbecue pit area and a fire pit.
“We just completed the first phase of the renovation and will start the second phase in January,” Muller said.
Orion’s transformation comes amid a boom in Pierce County’s apartment industry, where thousands more units are predicted to open through 2021, according to apartment rental research firm Dupre+Scott Apartment Advisors.
APARTMENT CONSTRUCTION AT RECORD LEVELS
Nationwide, multifamily units are being added at a rate not seen since the 1980s, according to a February paper by Freddie Mac. Activity in the Puget Sound region is one of the reasons why.
In 2017 through 2019, Pierce County could see record levels of apartment construction. More than 3,500 apartment units could open countywide, the mortgage investor projected in September. In 2018 alone the firm predicts 2,145 new units will open.
The wave of new Pierce County multifamily projects in various planning stages include 140 units in the Proctor South development, 78 units in two locations catering to millenials — many of them “micro units” under 450 square feet, and 108 apartments on Tacoma’s Sixth Avenue. A 35-unit complex at North Third and J streets opened in August.
Apartment vacancies have dropped below 4 percent across Puget Sound, the company said in a recent weekly report.
A similar but smaller building wave occurred in 2011 through 2014, in the wake of the Great Recession, and previously in the late 1990s, the data show.
Unsurprisingly, units in newer buildings are renting for more than those in older structures.
A studio at Proctor Station was advertised for $1,090 earlier this year. Before its makeover, Commencement Terrace rented a one-bedroom, 600-square-foot apartment for $535.
Muller said rent for newly renovated, 600-square-foot one-bedroom units at Orion have escalated to $1,175 per month. Renovations are costing around $13,000 to $14,000 per unit, she said.
POPULATION OUTPACES CONSTRUCTION
The central Puget Sound area welcomed its 4 millionth resident sometime last summer. Pierce County alone has welcomed nearly 20 more people per day in the past decade, according to the state’s Office of Financial Management. But in 2015, leading to the start of this year, that pace increased to more than 39 people per day.
Rents usually increase when population growth outpaces housing unit construction.
Historically, added housing units haven’t kept pace with the number of jobs created in the area, according to an analysis by the Puget Sound Regional Council. Since 2010, the region has added three jobs for every housing unit created. If the trend continues, higher housing prices are bound to follow.
Rents for homes, apartments and condos in Pierce County have increased 5.1 percent in the past year, according to real estate data firm Zillow, with King County’s increase pegged at 7.8 percent.
ORION MAKEOVER WELCOMED BY POLICE
Orion’s second phase includes the renovation of 36 units and more common areas, she said. Together, the first and second phases could cost $4.5 million.
“It’s been such a change,” Muller said. She said the Tacoma Police Department complimented the company for the changes, saying crime has dropped in the area.
Police spokeswoman Shelbie Boyd said the patrol officer for the area said “calls for service are way down. Whatever they did, once they changed the name it was better as a patrol officer.”
The Orion is part of a suite of properties managed by Investors Management Group, which bought Commencement Terrace for $11.1 million in 2014, according to county property records. The company buys and manages multifamily properties all over the country.
The building was originally constructed in 1979. Its units have sweeping views of Commencement Bay and Mount Rainier and are a short walk from Stadium High School and the 27-acre Wright Park.