Western Real Estate Business

JUL 2018

Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.

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C A L I F O R N I A 12 • July 2018 • Western Real Estate Business www.REBusinessOnline.com PA C I F I C N O R T H W E S T PARTNERSHIP ACQUIRES 46,000 SF VINTAGE INDUSTRIAL BUILDING FOR $6.3 MILLION PORTLAND, ORE. — ScanlanKemper- Bard Cos., in partnership with Try- ba Architects and the principals of Lorentz Brunn Construction, has ac- quired a vintage industrial property located at 1805 SE MLK Blvd. in Port- land's Central Eastside district. The partnership purchased the property for $6.3 million, or $136 per square foot, and it plans to invest $8.9 million in renovations for a total project cost of $15.2 million. Originally the home of Morehouse Glass, the two-story, 46,000-square-foot property is 1960s vintage concrete construction with 20- foot ceilings, original glulam beams and concrete floors. The project will be rebranded The Glass Lab. LASALLE BUYS 131,000 SF OFFICE BUILDING IN SEATTLE SEATTLE — LaSalle Investment Management has purchased 202 Westlake, an office building located in Seattle's South Lake Union neigh- borhood. Developed in 2013, the six- story, 131,000-square-foot property is a multi-tenant building that caters to technology and life science users. Amazon occupies the building's en- tire office component. The balance of the property is leased to four ground- floor retail tenants: Chipotle Mexican Grill, Umpqua Bank, Kigo Kitchen and Homegrown. HFF ARRANGES $47.4 MILLION IN JOINT VENTURE EQUITY FOR 347-UNIT MULTIFAMILY DEVELOPMENT IN PORTLAND PORTLAND, ORE. — HFF has se- cured $47.4 million in joint venture equity for the development of 100 Co- lumbia, a high-rise multifamily com- munity located in Portland's central business district. Ira Virden, Mark Erland and Matt Benson of HFF, on behalf of developer Alamo Manhat- tan, arranged the joint venture equity partnership with Diamond Realty Investments. Slated for completion in 2020, the property will feature 347 units in a mix of studio, one- and two- bedroom apartments, averaging 801 square feet. The 20-story development will feature premium interior finishes and community amenities, including a 15,000-square-foot amenity terrace and a 20th-floor rooftop residential lounge, and a 16th-foor terrace. Ad- ditionally, the property will feature 15,000 square feet of ground-floor re- tail space. COLLIERS BROKERS $3 MILLION SALE OF MEDICAL OFFICE PROPERTY BOTHELL, WASH. — Colliers In- ternational has brokered the sale of The Romero Professional Building, a medical office property located at 19110 Bothell Way NE in Bothell, a northeastern suburb of Seattle. LAIT Bothell LLC sold the property to Both- ell RE Venture LLC for $3 million, or $307.88 per square foot. Built in 1987, the property features 9,744 square feet. Current tenants are Bothell Endodon- tics, Bothell Physical Therapy, East- wind Acupuncture Clinic and Formo Enterprises. Pat Mutzel and Jeff Jere- miah of Colliers represented the seller, while Derek Heed and Gregg Riva, also of Colliers, represented the buyer in the off-market transaction. SWIFT ACQUIRES 145,578 SF OFFICE PROPERTY IN METRO SEATTLE FOR $45.4 MILLION BELLEVUE, WASH. — Swift Real Es- tate Partners has purchased Oakhurst Center, a two-building office property located at 14335 and 14475 NE 24th St. in Bellevue. Barings, on behalf of an institutional investor, sold the proper- ty for $45.4 million. At the time of sale, the 145,578-square-foot property was 79 percent occupied and leased. Kevin Shannon, Nick Kucha, Ken White, Tim O'Keefe, Mike Schreck, Michael Moll, James Childress and Bill DeLacy of NKF Capital Markets represented the seller, while the buyer was self- represented in the deal. SAVILLS STUDLEY ARRANGES SALE OF REGIONAL SHOPPING CENTER IN MEDFORD MEDFORD, ORE. — Savills Studley has brokered the sale of WinCo Plaza, a regional shopping center located in Medford. Larkspur, Calif.-based Ar- gonaut Investments purchased the 147,943-square-foot property from a private family office for an undis- closed price. Located at Barnett Road and Interstate 5 Freeway, the property is anchored by WinCo Foods, which occupies 94,500 square feet. Addi- tional tenants include Dollar Tree, McDonald's, Payless ShoeSource and Valley Immediate Care. Maurice Nie- man of Savills Studley handled the transaction. ScanlanKemperBard Cos. plans to invest $8.9 million in renovations at the industrial property located at 1085 SE MLK Blvd. in Portland. SEATTLE MULTIFAMILY MARKET SNAPSHOT By Marty Leith, executive managing director of ARA Newmark Amazon remains the primary driver of growth in Seattle. A recent "head tax" measure passed by the Seattle City Council caused Amazon to con- template slowing their growth in the city; howev- er, after pressure from a group of companies, led by Amazon, the council reversed their decision, paving the way for continued growth by the city's largest private employer. As of September 2017, Amazon occupied 8.1 million square feet of office space across 33 buildings in Seattle. By 2022, they are expected to occupy between 12 million and 13.5 million square feet of space based on future developments, lease commitments, and rumored deals yet to be finalized. Aside from Amazon, other major employers are moving forward with large expansion plans in the Seattle core, including Expedia, Google, Facebook and F5 Networks. The Seattle market added nearly 18,000 mul- tifamily units from 2016-2017, representing a 6 percent increase in inventory. There are another 20,700 units under construction with the highest concentration in Seattle's urban core and down- town Bellevue. The wave of deliveries has caused occupancies to dip, but asking rents remain strong. Towers built since 2016 in downtown Seattle are averaging $4 per square foot asking rent and new deliveries are offering concessions to compete for tenants. While this is typical practice, concessions have increased up to two months in some cases. Although rents remain high in the urban core, rent growth has moderated to 2.8 percent year over year. In downtown Seattle and surrounding submarkets such as Capitol Hill and Queen Anne, rents are flat year over year. This plateau resulting from increased competition was expected but most signs indicate it is temporary due to new supply. Overall for the market, 12-month absorption rates remain almost double the historical average, driv- en by population growth and job growth. Peripheral submarkets in South King County, Snohomish, Pierce and Kitsap counties have con- tinued to experience strong rent growth as more people look to escape the high rents of Seattle. Seattle's home price growth continues to lead the nation, at 14 percent year over year and condo prices are up 21 percent year over year. Continued price escala- tion combined with slowing rent growth is motivating some condo developers. California developer Laconia is converting its 41-story tower at Sixth and Wall, which broke ground in June. As of March 2018, only 7 percent of down- town Seattle's residential construction pipeline was condos, but this is an increase from earlier in the cycle, and it is likely more of these developments will be converted before completion. "Despite the high cost of construction and 10- year run up in land values, multifamily develop- ers remain active, particularly in Seattle's shoulder markets," states Leith. South, in Tukwila, Alliance Residential broke ground on Marvelle at South- center, a community designed for residents 55+, and there is a high-rise site for sale in Tacoma. East, in Bellevue, there are several development sites on the market, including an 11-acre mixed- use site in Downtown Bellevue. To the west, inter- est in Bremerton is picking up due to the new fast ferry which gives residents a 30-minute commute into downtown Seattle. The recent groundbreaking of Marvelle at Southcenter, a community designed for residents 55+ in Tukwila. Pictured above is Jeremiah Jolicoeur (left), Alliance Residential and Marty Leith, ARA Newmark. Leith

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