South Seattle Business Park

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South Seattle Business Park

4634-4636 EAST MARGINAL WAY S, SEATTLE, WASHINGTON

97,653 SQUARE FOOT MIXED-USE OFFICE AND INDUSTRIAL PARK

Executive Summary

South Seattle Business Park

CBRE, Inc., as exclusive advisor, presents the opportunity to acquire South Seattle Business Park in Seattle, Washington (the "Property"). South Seattle Business Park is a 97,653 Square Foot mixeduse office and industrial park located in the close-in South Seattle submarket. The Property consists of five (5) buildings that are currently 85.7% leased to a diverse roster of tenants including Alaska Airlines, Arena Sports, and Grand Central Bakery, and benefits from excellent exposure on East Marginal Way (SR-99), one of the predominant north-south thoroughfares running through Seattle. The Property is centrally located in the South Seattle submarket and its location near the Port of Seattle and the Seattle CBD provides proximity to a diverse tenant base and immediate access to State Route 99 and Interstate 5.

Based on the current occupancy of 85.7%, South Seattle Business Park presents investors a compelling value-add investment opportunity to increase income and returns by leasing the currently vacant space. The property capitalizes on an advantageous location, office and light industrial functionality, a dynamic submarket, and pricing below replacement cost in a highly attractive financing environment.

The Puget Sound region boasts a highly diversified economy anchored by high growth industries including software, technology, aerospace manufacturing, retailing, global health and life sciences. The continued job growth generated by these industries is resulting in strong space absorption, and a regional employment rate that is among the highest in the United States.

PROPERTY OVERVIEW

Address

4634 - 4636 East Marginal Way South Seattle, WA 98134

Office: 51,544 square feet

Building Area

Industrial: 46,109 square feet

Total

97,653 square feet

Number Of Buildings Five (5) Office/Light Industrial buildings

Occupancy

85.7%

Site Area

2.74 acres

Major Tenants

Alaska Airlines, Arena Sports, Grand Central Bakery

Building A: 1953

Building B: 1983

Year Built

Building C: 1983

Building D: 1947

Building E: 1947

INVESTMENT SUMMARY

Offered Price

$9,500,000

Prospective New Loan

$6,175,000

Equity Required (includes 1% loan fee)

$3,386,750

In-Place

Year 1

Year 2

Scheduled NOI

$768,780 $842,439 $910,634

Capitalization Rate

8.1%

8.9%

9.6%

All Cash IRR

15.4%

1

East Marginal Way S.

S. Alaska Street

Leveraged IRR Price per Square Foot

28.8% $97.28

Executive Summary

Investment Highlights

STABLE INCOME PROFILE WITH UPSIDE OPPORTUNITY

IRREPLACEABLE PROTECTED LOCATION

South Seattle Business Park is 85.7% occupied by a diverse mix of 15 tenants, with only 23.8% of The property has a strategic location less than 5 minutes south of

the leases expiring during the next three years creating a stable initial cash flow that can be increased Seattle's Central Business District via East Marginal Way and the substantially through leasing of the currently vacant space. The lease-up opportunity, anticipated pricing Alaskan Way Viaduct with close proximity to Interstate 5, the Port of

below replacement cost, and a highly attractive financing environment combine to provide investors with Seattle's main terminals and SODO/South Seattle business centers.

an opportunity to realize enhanced investment returns.

The property offers a unique appeal to small and midsize local,

TENANT SUMMARY

regional and national service firms without the congestion and higher rents of the CBD. The limited availability of development sites, high

Major Tenant Alaska Airlines

Square Feet 12,250 SF

% Of Project 12.5%

replacement costs, and a lengthy and costly entitlement process limits the opportunity for future development of competing product.

Arena Sports

26,094 SF

26.7%

Grand Central Bakery

14,741 SF

15.1%

2

South Seattle Business Park

ATTRACTIVE SUBMARKET WITH HIGH PROFILE COMPANIES The South Seattle office submarket is on the 50-yard line just minutes away from downtown Seattle and easy access from Bellevue, Tacoma and Seattle-Tacoma International Airport. This prime location has allowed it to evolve from an industrial area to an up and coming office area with numerous new office tenants occupying Class A office projects. High profile companies with offices in the South Seattle office market include: Sur La Table, Alaska Airlines, Boeing Commercial Airplanes, Real Networks, King5, Oculus VR, Porch. com, Facebook and numerous other datacenter and industrial users. The South Seattle market consists of over two million square feet of office buildings with expanding office tenancy clustered around the SODO, South Seattle, and Georgetown neighborhoods.

EXCEPTIONAL REGIONAL ECONOMIC OUTLOOK The Puget Sound Region possesses a highly diversified economy anchored by dynamic industries including: aerospace, software, technology, research, life sciences, natural resources and retailing. Numerous globally recognized organizations are based in the region including , Boeing Commercial Airplanes, Costco, , The Bill and Melinda Gates Foundation, Microsoft, Nordstrom, PACCAR, and Starbucks. These companies provide a significant base of direct employment in high-wage positions and serve as incubators for other innovative and high-growth companies. The combination of dynamic industries and a highly educated labor pool have contributed to the creation of nearly 200,000 new jobs and the absorption of nearly 8 million square feet of office space since 2010. These strong results are projected to continue in office-occupying sectors as the region is expected to achieve job growth of 1.6% per year over the next six years according to CBRE Econometric Advisors.

3

Executive Summary

ELLIOTT BAY

PORT OF SEATTLE

WEST SEATTLE BRIDGE

SEATTLE CBD

Spokane St.

South Seattle Business Park

4

Mukilteo

9

2

99

Lynnwood

Edmonds Mountlake Terrace

Shoreline

Bothell

522

522

Woodinville

Puget Sound

5

Kirkland

405

Redmond

99

Seattle

520

202

Bellevue

Lake Washington

405

90

Lake Sammamish

Sammamish

Mercer Island

90

5

South Seattle

Newcastle

Business Park Renton

Issaquah

Burien

Tukwila

18

Vashon

Seattle-Tacoma International Airport

South Seattle Business Park

2

4634-4636 EAST MARGINAL WAY S, SEATTLE, WASHINGTON

Investment Contacts

TOM PEHL Senior Vice President

206 442 2722 tom.pehl@

LOU SENINI Senior Vice President

206 292 6050 lou.senini@

Leasing Market Contacts

CAVAN O'KEEFE First Vice President

206 292 6099 cavan.okeefe@

NICK CARKONEN Vice President 206 292 6039

nick.carkonen@

Debt Contact

DAVID STINEBAUGH Senior Vice President 206 830 6492

david.stinebaugh@

Tacoma

Kent

5 18

167

99

Federal Way

Auburn

CBRE, INC. Broker Lic. 00409987 1420 Fifth Avenue, Suite 1700 Seattle, WA 98101, USA

? 2015 CBRE, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no gaurantee, warranty, or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

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