Middle Market Digest: This Week in the North West

This week in the North West region, Cushman & Wakefield has bolstered its Northern California Valuation & Advisory Team with five new hires. Check out all the other news you might have missed in the region below.—Natalie Dolce

BY THE NUMBERS

SEATTLE—According to a recent report from Kidder Mathews, compared with the rush of activity in a strong 4th quarter finish to 2016, the region's office market coasted through the first quarter of 2017. “All trends held their course; vacancy falling, absorption positive, rents increasing, investors buying, but the changes were modest. The regional vacancy rate inched downward from 7.73% to 7.69% while 19 bps were shaved off the availability rate dropping that indicator to 10.82%. This on net absorption of only 43,375 square feet in the quarter.” The average asking rent, according to the firm's latest report, was up in each of the submarkets, ranging from 1% in East King County to 5% in South King County. The net number of projects under construction fell to 19 in the quarter with the delivery of Amazon II (now called Day 1) and the Commons at Ballard. The total amount of space underway is 7.33 million square feet.

NEWS & NOTABLES

SAN MATEO, CA—Housing Industry Foundation executive director Robert Freiri revealed that HIF is hosting its inaugural fundraising event, Kicking Out Homelessness Kickball Tournament, to help individuals and families remain in or return to stable housing in San Mateo and Santa Clara counties. Ten local companies will join HIF on the kickball field for an afternoon of play and teamwork, all while raising money to help prevent homelessness in our communities. HIF's goal is to raise $30,000 through the kickball tournament. Funds raised will go towards HIF's Emergency Housing Fund, which distributes grants to individuals and families threatened with homelessness or currently facing homelessness in San Mateo and Santa Clara Counties. The tournament will take place at Twin Creeks Sports Complex in Sunnyvale from 12 PM – 5 PM on May 5th, 2017, the first day of Housing Leadership Council of San Mateo County's Affordable Housing Week.

SILICON VALLEY, CA—Cushman & Wakefield has bolstered its Northern California Valuation & Advisory Team with five new hires who bring a wealth of commercial real estate experience. The new members of the Cushman & Wakefield Valuation & Advisory Team have a background in consulting and valuation for a wide range of property types throughout the United States. Collectively, they have valued billions of dollars in commercial property in the Silicon Valley area and beyond. The new team members include Senior Director Gene Williams, MAI; Director Bryson Young; Associate Director Dan Schmidt; Associate Director, Kevin Fama and Associate Joanna Shen. Most recently, the team worked for CBRE in Silicon Valley.

DEAL TRACKER

SEATTLE—CBRE Capital Markets has arranged the sale of Willows Commerce Park, a class A, four-building office and warehouse park located in Redmond, WA. The 421,415-square-foot property is located in the Redmond and Willows Road submarket, minutes away from downtown Redmond and downtown Kirkland. Brad Zampa, Mike Walker and Megan Woodring of CBRE's San Francisco office arranged the five-year, non-recourse, full-term interest only, floating-rate acquisition financing at a very competitive spread priced over 30-day LIBOR on behalf of the borrower, Kennedy Wilson's Fund V. The financing was provided by a national financial service provider. Tom Pehl and Lou Senini of CBRE's Seattle office represented the seller.

BAKERSFIELD, CA—Hanley Investment Group Real Estate Advisors completed the sale of a brand-new construction single-tenant corporate Starbucks with a drive-thru. The purchase price of $2.65 million represented a cap rate of 4.09% and $1,432 per square foot. According to CoStar, this sale achieved a record low cap rate for a single-tenant Starbucks in Bakersfield and a record high price per square foot in the city. Hanley Investment Group Executive vice president Bill Asher and associate Jeff Lefko and represented the seller, Evergreen Development. Spanning the last 42 years, Evergreen is a national retail and multi-family development company with heavy emphasis on developing projects in California, Colorado, Arizona and now Utah. The buyer, a private investor from Los Angeles, was represented by Joe Bolognese of Major Properties Real Estate in Los Angeles.

KENT, WA—CenterPoint Properties is proud to announce the lease of its 223,800-square-foot speculative facility located at 26600 72nd Avenue South in Kent, WA. The 10-year lease will consolidate two facilities from our existing Tenant, currently located elsewhere in the Kent Valley area. The facility will also include room for the tenant's future growth and expansion. Located on 12 acres with tremendous exposure and access to Highway 167 and S 277th Street, the building will boasts an approximately 9,000-square-foot mezzanine, 33 dock doors, 36' clear heights, 200 parking spaces and 41 trailer stalls and 8” reinforced floors. It is 24 miles to the Port of Seattle and 15 to the Port of Tacoma.

OAKLAND—NAI Northern California, a member of the world's premier managed network of commercial real estate firms, has sold a unique multifamily property in West Oakland. SVP, Grant Chappell and Investment Advisors, Tim Norkol and Jenny Lu, represented the seller in the $1.3-million dollar sale. Sold at $350,000 over the asking price, the 2-unit, 3,120 square foot multifamily building received 15 offers and was followed by a swift 21-day Escrow. Additionally, the transaction set a record for West Oakland at $650,250 per unit.

SEATTLE—Pacific Cataract and Laser Institute has purchased the Sweeney Conrad Building, located at 2606 116th Avenue NE in Bellevue, WA, for $13.5 million. Jeff Chaney, a senior vice president with Kidder Mathews commercial real estate firm, represented PCLI in the transaction. The 33,155 square foot, class A office building is located in close proximity to Interstate 405 and State Route 520. It is just north of the 36-acre Spring District that is currently under development. The Spring District is a mixed-use project featuring office, retail, and residential uses. It will bring numerous amenities and vibrancy to the area surrounding the Sweeney Conrad Building.

This week in the North West region, Cushman & Wakefield has bolstered its Northern California Valuation & Advisory Team with five new hires. Check out all the other news you might have missed in the region below.—Natalie Dolce

BY THE NUMBERS

SEATTLE—According to a recent report from Kidder Mathews, compared with the rush of activity in a strong 4th quarter finish to 2016, the region's office market coasted through the first quarter of 2017. “All trends held their course; vacancy falling, absorption positive, rents increasing, investors buying, but the changes were modest. The regional vacancy rate inched downward from 7.73% to 7.69% while 19 bps were shaved off the availability rate dropping that indicator to 10.82%. This on net absorption of only 43,375 square feet in the quarter.” The average asking rent, according to the firm's latest report, was up in each of the submarkets, ranging from 1% in East King County to 5% in South King County. The net number of projects under construction fell to 19 in the quarter with the delivery of Amazon II (now called Day 1) and the Commons at Ballard. The total amount of space underway is 7.33 million square feet.

NEWS & NOTABLES

SAN MATEO, CA—Housing Industry Foundation executive director Robert Freiri revealed that HIF is hosting its inaugural fundraising event, Kicking Out Homelessness Kickball Tournament, to help individuals and families remain in or return to stable housing in San Mateo and Santa Clara counties. Ten local companies will join HIF on the kickball field for an afternoon of play and teamwork, all while raising money to help prevent homelessness in our communities. HIF's goal is to raise $30,000 through the kickball tournament. Funds raised will go towards HIF's Emergency Housing Fund, which distributes grants to individuals and families threatened with homelessness or currently facing homelessness in San Mateo and Santa Clara Counties. The tournament will take place at Twin Creeks Sports Complex in Sunnyvale from 12 PM – 5 PM on May 5th, 2017, the first day of Housing Leadership Council of San Mateo County's Affordable Housing Week.

SILICON VALLEY, CA—Cushman & Wakefield has bolstered its Northern California Valuation & Advisory Team with five new hires who bring a wealth of commercial real estate experience. The new members of the Cushman & Wakefield Valuation & Advisory Team have a background in consulting and valuation for a wide range of property types throughout the United States. Collectively, they have valued billions of dollars in commercial property in the Silicon Valley area and beyond. The new team members include Senior Director Gene Williams, MAI; Director Bryson Young; Associate Director Dan Schmidt; Associate Director, Kevin Fama and Associate Joanna Shen. Most recently, the team worked for CBRE in Silicon Valley.

DEAL TRACKER

SEATTLE—CBRE Capital Markets has arranged the sale of Willows Commerce Park, a class A, four-building office and warehouse park located in Redmond, WA. The 421,415-square-foot property is located in the Redmond and Willows Road submarket, minutes away from downtown Redmond and downtown Kirkland. Brad Zampa, Mike Walker and Megan Woodring of CBRE's San Francisco office arranged the five-year, non-recourse, full-term interest only, floating-rate acquisition financing at a very competitive spread priced over 30-day LIBOR on behalf of the borrower, Kennedy Wilson's Fund V. The financing was provided by a national financial service provider. Tom Pehl and Lou Senini of CBRE's Seattle office represented the seller.

BAKERSFIELD, CA—Hanley Investment Group Real Estate Advisors completed the sale of a brand-new construction single-tenant corporate Starbucks with a drive-thru. The purchase price of $2.65 million represented a cap rate of 4.09% and $1,432 per square foot. According to CoStar, this sale achieved a record low cap rate for a single-tenant Starbucks in Bakersfield and a record high price per square foot in the city. Hanley Investment Group Executive vice president Bill Asher and associate Jeff Lefko and represented the seller, Evergreen Development. Spanning the last 42 years, Evergreen is a national retail and multi-family development company with heavy emphasis on developing projects in California, Colorado, Arizona and now Utah. The buyer, a private investor from Los Angeles, was represented by Joe Bolognese of Major Properties Real Estate in Los Angeles.

KENT, WA—CenterPoint Properties is proud to announce the lease of its 223,800-square-foot speculative facility located at 26600 72nd Avenue South in Kent, WA. The 10-year lease will consolidate two facilities from our existing Tenant, currently located elsewhere in the Kent Valley area. The facility will also include room for the tenant's future growth and expansion. Located on 12 acres with tremendous exposure and access to Highway 167 and S 277th Street, the building will boasts an approximately 9,000-square-foot mezzanine, 33 dock doors, 36' clear heights, 200 parking spaces and 41 trailer stalls and 8” reinforced floors. It is 24 miles to the Port of Seattle and 15 to the Port of Tacoma.

OAKLAND—NAI Northern California, a member of the world's premier managed network of commercial real estate firms, has sold a unique multifamily property in West Oakland. SVP, Grant Chappell and Investment Advisors, Tim Norkol and Jenny Lu, represented the seller in the $1.3-million dollar sale. Sold at $350,000 over the asking price, the 2-unit, 3,120 square foot multifamily building received 15 offers and was followed by a swift 21-day Escrow. Additionally, the transaction set a record for West Oakland at $650,250 per unit.

SEATTLE—Pacific Cataract and Laser Institute has purchased the Sweeney Conrad Building, located at 2606 116th Avenue NE in Bellevue, WA, for $13.5 million. Jeff Chaney, a senior vice president with Kidder Mathews commercial real estate firm, represented PCLI in the transaction. The 33,155 square foot, class A office building is located in close proximity to Interstate 405 and State Route 520. It is just north of the 36-acre Spring District that is currently under development. The Spring District is a mixed-use project featuring office, retail, and residential uses. It will bring numerous amenities and vibrancy to the area surrounding the Sweeney Conrad Building.