t Plaza 220

Overview

The Offering

Kidder Mathews has been retained to exclusively market for sale Plaza 220 in Mountlake Terrace just off of I-5. This 21,000 SF, 100% leased office building is situated two minutes off of I-5 in a historically stable office park within the high growth market of Mountlake Terrace, thirteen miles north of downtown Seattle. Located on 47,000 SF the building provides ample surface parking, views of the Olympic Mountain Range, as well as a peaceful suburban setting for its tenants.

This property has historically had a strong level of occupancy largely due to its close proximity to the freeway and quick access to nearby retail and restaurants. In its current configuration, Plaza 220 has proven ideal for a broad range of tenants, from therapists to law firms. The building’s professional setting attracts numerous local, quality tenants that largely serve the fast growing South Snohomish and North King County populations.

This offering presents an excellent opportunity to acquire a stabilized office building with value-add potential in a high growth market just outside of Seattle, near incoming light rail and transit options connecting the entire Puget Sound

Offering Process
The property is being offered for sale at $3,995,000. The ownership will review offers as received.

Property Details

Investment Highlights

  • Strong, Stable Cash Flow
    Numerous well-known local tenants occupy 94% of the building. The property has an excellent professional tenant mix with several therapist groups, law firms, financial management, and engineering companies.
  • Incoming Light Rail & Additional Transit Options
    The property is located within one mile of the expected 220th St SW light rail station, scheduled to connect Lynnwood and Mountlake Terrace with the Sound Transit Light Rail by 2023. The property is also within 1.5 west of the Mountlake Terrace Transit Center as well as 2.2 miles south of the Lynnwood Transit Center to the north.
  • Excellent Access & Visibility
    Plaza 220 is off of the 220th St SW on/off ramp to I-5 and provides excellent access immediately to the freeway. Signage also provides significant visibility for the high traffic counts on 220th St SW
  • Ample Surface Parking
    Approximately 73 surface level parking stalls provide over 3:1000 parking ratios for the numerous tenants with transitory clientele.

Value-Add Potential with Minimal Building Improvements
The current rents are between 5% and 10% below the local market. Small updates to the property, including updating the lobby, minor interior improvements, & common area bathrooms offer immediate value-add potential.

Property Overview

Address
21907 64th Avenue West
Mountlake Terrace, WA

Total Gross Building Size
22,438 SF

Occupancy
94%

Year Built
1987

Buildings
One (1)

Stories
Three (3)

Parking
Surface – 73 Stalls

Land Area
47,101 SF | 1.08 AC

Zoning
General Commercial (GC)

Year 1 Projected NOI
$207,715

Year 3 Projected NOI
$260,886

Foundation
Concrete

Exterior Wall
Concrete Block

Roof Type
Built Up

Recent Renovations
2nd floor bathrooms (currently under renovation)
3rd floor bathrooms (planned renovation)

First Floor
Second Floor
Third Floor

Location

Puget Sound Overview

Puget Sound is one of the most desirable regions in the United States to live, between the scenic backdrop, recreational opportunities, thriving economy and some of the world’s top employers. Over the last decade Washington State’s population has grown 14.1% outpacing the national average, largely due to local companies rapid growth and new companies relocating to the region. The Puget Sound region is one of the most vibrant economies in the United States.

Contributing factors to strong regional economy:

  • Educated population
  • Close proximity to Seattle-Tacoma International Airport (the fastest growing large airport in the US in 2015 and 2016) and the Ports of Seattle and Tacoma
  • Home to 12 Fortune 1000 companies, including Microsoft, Costco, Symetra Financial, Amazon.com, Boeing, REI, Paccar, Expedia, Starbucks, Alaska Airlines, Nordstrom and Esterline Technologies

Nearby

Seattle Cultural/Quality of Life Highlights

The Seattle region has an international reputation as a mecca for those who love the great outdoors, with immediate access to water, golf courses and the mountains. Seattle is blessed with one of the most stunning backgrounds, surrounded by water, the Puget Sound, Lake Washington and Lake Union and with the Olympic and the Cascade mountain ranges, in the distance.

Strengths of Seattle Living

  • One of the top educated regions in America
  • Seasonal climate and weather
  • Award winning restaurants
  • Active nightlife
  • Vast cultural activities and inclusion
  • Beautiful surroundings
  • Highly walkable
  • Low crime rate

Market Area

Snohomish County Review

The Northend office market showed gradual improvement through 2016 and continued this positive trend into 2017 with a 1st quarter vacancy rate of 7.18%, down from year-end 2016 vacancy of 7.29%. The availability rate also dropped by 10 bps to 10.10%, compared to the year-end rate of 10.20%. Net absorption for the 1st quarter 2017 was positive at 30,811 s.f. following strong 2016 absorption of 450,739 s.f. The Everett CBD has been fairly quiet with a current vacancy of 6.5%. The Lynnwood/Edmonds submarket remains one of the more active Northend submarkets with a 1st quarter vacancy of 6.0%, down from the year-end 2016 vacancy rate of 6.9%, fueled by strong 2017 year-to-date net absorption of 58,883 s.f. and no projects currently under construction. The Northend submarkets continue to attract smaller office tenants looking for a combination of affordable office space and good proximity to lower cost housing for its employees. Asking rates moved up by $0.21/s.f. from last quarter to $23.79/s.f./year, full service which compares favorably to other regional office markets. The gradual decline of vacancy and slow but steady increase in rent quotes are forecast to continue through 2017.

Employment Growth

Over 36,000 jobs were added during 2015 in the Seattle MSA (Seattle/ Eastside/ Everett) which is an annualized growth rate of 2.46%. Current unemployment rate is 4.05%. Employers are having trouble finding skilled workers, especially in STEM (science/technology/engineering/math) related jobs. More than 25,000 tech related jobs are unfilled in Seattle and an estimated 88,000 job openings in total (YE 2015). Strong growth among a wide variety of tech & business sectors companies helped fuel the supply of new jobs.

3rd Smartest City in North America by Fast Company

5th Best City in the Nation to find a Job by Glassdoor

6th Best City in the U.S. for Business Careers by Forbes

Seattle Cultural/Quality of Life Highlights

The Seattle region has an international reputation as a mecca for those who love the great outdoors, with immediate access to water, golf courses and the mountains. Seattle is blessed with one of the most stunning backgrounds, surrounded by water, the Puget Sound, Lake Washington and Lake Union and with the Olympic and the Cascade mountain ranges, in the distance.

Strengths of Seattle Living

  • One of the top educated regions in America
  • Seasonal climate and weather
  • Award winning restaurants
  • Active nightlife
  • Vast cultural activities and inclusion
  • Beautiful surroundings
  • Highly walkable
  • Low crime rate

Major Regional Employers

Microsoft, Boeing, and now Amazon, have been major tenants in the Puget Sound’s office markets. An emerging trend in this area, however, has been the growth of startup technology and life science companies, thanks largely to a highly educated employee base.

The University of Washington, Seattle University, and young employee alumni of Microsoft and Amazon have amplified the entrepreneurial spirit in the area.

Further, the world’s best capitalized non-profit, Bill and Melinda Gates Foundation, located in between Ivar’s Pier 54 and it’s Salmon House, with a commitment to entrepreneurialism, expanded educational opportunities, and access to information technology.

Due Diligence

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