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SEATTLE, WA—While indicators and scuttlebutt are pointing toward a downward turn in the retail sector of Puget Sound’s real estate market, the market still looks good on the surface, and investors continue making their way to the bargaining table. In light of previously slowing retail sales, accelerated by the events of September 11th, Paul Sleeth, a broker with the Seattle office of Colliers International, tells Globe St.com, “Logic would dictate we’d be seeing marginal tenants going bankrupt, others not renewing and rent rates going down.”

Instead he say, at least thus far, the market hasn’t experienced any major destabilization. He admits, however, “There has been a fair amount of conversation that the investment side of the market is going to turn down.”

Erin Conger, a retail specialist with Collier’s Seattle, says, “We just completed our spring/summer survey of retail rents and vacancies.” While she says the numbers were the strongest in years, she is quick to add, “Obviously a lot of things have happened recently that could change that.” She also explains, “Retail will often lag behind in a cycle, with office going first, then industrial. For now, the main focus will be holiday sales and how those go.”

Coming on the heels of several substantial transactions ($10-million-plus) over the past several months, Sleeth recently closed the $13.65-million sale of the Northgate Village Shopping Center. Located on Northgate Way, between Eight Ave. and Roosevelt Way, the 97,155-sf retail mall exchanged hands at a listed cap rate of 9%.

The property, anchored by a 23,040-sf TJ Maxx and a 26,802-sf Longs Drugs, was built in 1969 and remodeled in 1980. Other key tenants include Seattle’s Best Coffee, Pacific Fabrics, Shoe Pavillion and a branch of the US Postal Service. Only a 3,000 sf space is currently available, says Sleeth, at an asking rate of $24 per sf.

About the mall, Sleeth says it is well located. “Northgate is densely populated, and there are some good opportunities to move rents substantially over the next three to eight-year horizon, and the potential to do a complete remodel—going up three or four stories down the road.”

The decades-old Hawaiian trust known as The Estate of James Campbell had owned the mall for a number of years. The motivation for selling now, says the Colliers broker, was that the mall had simply reached the end of its investment cycle. A partnership of three, unnamed, local investors was the buyer. Sleeth says the sale went under contract about three months after being listed.

As for the near future, Sleeth remains “guardedly optimistic” as the current climate of low interest rates dangles a large carrot before investors.

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