LACEY, WA-Nine investors from Oregon, Washington, California and Virginia have acquired the Lacey Center, a 152,605-sf shopping center that is 95% leased. The property is anchored by Safeway, Big Lots, Dollar Tree and Hollywood Video. Other national tenants include Radio Shack, Quiznos, Papa Murphy’s, Supercuts, Godfather’s Pizza, Jiffy Lube and Starbucks. South Puget Sound Community College also occupies 19,000 sf of space. Located just off Interstate 5 at 1401 Marvin Road NE, the 17.5-acre property has four buildings plus one developed pad and one developable pad for restaurants or retailers. The development opened in 1987. The seller was Portland developer Marty Kehoe. The sale price was $15.6 million, or $104.85 per sf. Each of the owners put up between 4.8% and 12% of the $4.2 million in required equity. As part of the deal, the buyers assumed an $11.4-million loan with a 10-year term, a 30-year amortization and an interest rate of 5.69%. The cash-on-cash return is estimated at slightly more than 8% and the projected return in year seven is 16%.Portland-based RealNet Investments arranged and brokered the deal for a majority of the new owners. A tenant-in-common syndicate, RealNet typically would have acquired the property and then flipped it to the TIC ownership at a higher price, building its fees into the resale price. Company principal Jason Larson tells GlobeSt.com that this deal had to happen differently because Washington State has a high transfer tax and the financing that had to be assumed was a conduit loan.”The loan had already been sold as part of a package and to pull that out and change it is a huge thing,” says Larson. “We may have been the first sponsorship firm in the country to get a conduit loan assumed from one person to nine.”Ultimately, Larson says RealNet also left its brokerage fee on the table to offset above-average attorney costs associated with the loan assumption, “but it was a good investment for clients that will do business with us over and over again.” As well, RealNet will earn a small ongoing asset management fee, says Larson.Looking ahead, Larson says he won’t shy away from other Washington deals involving conduit loans because he likes the market and now understands how to make the process more efficient the next time around. “We will never spin our wheels again,” he says. “We now know how to get the loan done.”RealNet Investments represented five of the Lacey Center’s owners in the transaction. The other owners were represented by Nick Ostroff of Portland-based Realty Trust Group, Harry Keinath of Seattle-based Abacus Realty, Craig Roberts of Seattle-based Pacific Northwest Realty and independent broker Doug Foley.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Dig Deeper

 

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.