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SEATTLE-On the backside of a 1031 Exchange, Madonna Properties LLC, has paid $1.1 million for a 21,200-sf former fish plant on East Marginal Way that is fully occupied on a lease that runs for another 10 years.

Madonna Properties is an investment vehicle of Nelson Nakata, according to records retrieved from the Secretary of State’s website. The seller, Henry Liebman of American Retirement Inc., acquired the building in 1998 for $960,000, according to King County assessor sales records. CB Richard Ellis Broker Bob Swain, who represented Nakata in the transaction, tells GlobeSt.com the master tenant is William Wilder of Evergreen Marketing Inc., who has split up the space and subleased it to several users, as he has with several other buildings in town.

Located south of the West Seattle Bridge on a 34,510-sf lot at 4660 East Marginal Way, the building was built in the 1920s and used as a fish plant. It has been known as the Siberian Fish Building and later the Ocean Beauty Building.

Assuming Nakata’s purchase price was based on recouping the investment during the life of the current 10-year lease, the building would need to generate an average rent of about $0.43 per sf per year, which is about market rate for that size of a property in the city’s close-in industrial market, which has a vacancy rate in the low single digits.

Swain tells GlobeSt.com this is the first industrial purchase for Nakata. Typically an apartment investor, Nakata acquired the building as the down leg of a 1031 Exchange, says Swain. Nakata tells GlobeSt.com that two of the reasons he strayed from apartments and invested in industrial is that a lot of the apartment deals out there “just don’t make sense right now” and that the area where this industrial property is located contains a lot of under-utilized land that is being considered for redevelopment.

“We’ll sit on it for 10 years and see what happens,” says Nakata.

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