South Seattle Business Park
[Pages:6]CAPITAL MARKETS | INVESTMENT PROPERTIES
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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