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SEATTLE-An affiliate of locally based Gibraltar LLC has picked up a 20,000-sf residential-over-retail building in Ballard for $2.5 million. Located at the southwest corner of Northwest 60th Street and 15th Avenue Northwest, the two-story building has about 5,000 sf of street-level retail and 17 second-story apartments.

Gibraltar principal Gerry Pigotti tells GlobeSt.com the property had been “very poorly” managed. The plan is to clean up the retail tenancy, rehab the façade and upgrade the apartment units and raise rents as tenants roll. About $200,000 has been budgeted for the improvements, he says.

The retail space is anchored by Pasta Bella, a restaurant that has been in the location for 18 years. Other tenants include Liberty Tax, a neighborhood grocery and a drop station for dry cleaning. “We want to get rid of the dry cleaners and expand the restaurant,” Pigotti tells GlobeSt.com.

Gibraltar is a full service brokerage, property management and consulting company that invests on behalf of its principals and other investors. Pigotti’s partner is Kurt Fisher. Their portfolio includes about 360 apartment units and 200,000 sf of office and retail space in a couple of dozen properties split between the Puget Sound area and the Tri-Cities in Eastern Washington.

Pigotti says he and his investor partners are tend to buy and hold properties that generate good cash flow. The goal is to have its new Ballard building turn out like its San Marco residential-over-retail property in Seattle’s Queen Anne neighborhood. The commercial space had been empty for years and the apartments needed to be rehabilitated.

Gibraltar paid about $1.5 million for the property and invested another $300,000 in upgrades. By January 2005, Gibraltar landed a new restaurant called Veil, which opened late last year paying a triple-net rent in the $20s per sf. The current cap rate on cost is 8.3% and the cash-on-cash is north of 10%, says Pigotti, who estimates its current value at about $2.5 million.

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