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TACOMA, WA-Opus Northwest LLC, a member of Minneapolis-based Opus Group, has an option to purchase a block of downtown Tacoma from the city for $1.9 million. In two phases, Opus is planning to build mixed-use buildings of at least 10-stories on the site. The first building, Oxbow Financial & Technology Center, is 25% preleased, but Opus is waiting to hit the 50% mark before breaking ground.

The City of Tacoma originally purchased the property between 13th and 15th Streets and Pacific Avenue for its own uses, but has since determined the property to be surplus. The large, vacant lot in the middle of downtown is considered to be an eye sore, and the city is anxious to see it developed, according to Bill Frame of Kidder Mathews & Segner, Tacoma, the leasing agent for the property. Starbucks and McDonalds will hold space within the building’s two retail floors, says Frame.

Part of the problem is that the anchor tenant, Tacoma-based Oxbow Capital Partners, has yet to sign a lease agreement for approximately one-third of the building. It made a verbal commitment this past summer. Frame tells GlobeSt part of the hold up is that Oxbow has not as yet determined how much space it will require. Frame says he is confident that the terms will be worked out and a formal agreement will be consummated.

Oxbow Financial & Technology Center will have six floors of offices, two of parking and two of retail. Rates in the building are expected to run $20-24/sf net, based on size, tenant improvements and the floor. The second building, which also will depend on preleasing, is planned to be at least 10 stories.

Frame, an owner of downtown Class A space himself, says the Tacoma market, though not as hot as Seattle and the Eastside, has been picking up. This past summer Frame purchased the 85,000 sf Key Tower Plaza at 10th and Pacific, just a few blocks from the Oxbow site. While the building was only 40 percent occupied at the time of the purchase, Frame says they are close to closing on another 11,000-12,000 sf of space.

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