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SEATTLE-Members of Kauri Investment Ltd. and Ariel Development acquired their second Interbay asset this month, paying $10.5 million for a 1.67-acre site with a 114,385-sf manufacturing building on it. The seller is the occupant, GM Nameplate, which has leased back the building for two years and holds options to extend its stay.

The property address is 2040 15th Ave. West, near where West Armory Way branches off to the west. Earlier this month, GM Nameplate’s new owners acquired a six-building industrial site on West Armory Way from the Seattle Monorail Project for $12.5 million. Both purchases helped complete a 1031 exchange of profits from the group’s August sale of a warehouse property.

With regard to the most recent purchase, Kauri president Kent Ainger says he is currently negotiating with a prospective tenant that could move into the building when GM Nameplate vacates. “Their tenancy will require substantial improvements and change the use of the building but the tenant will be a great addition to the neighborhood,” he says. “The Interbay neighborhood is in the path of Seattle’s growth and is currently seeing new development including a Whole Foods store.”

If GM Nameplate does not want to move, Ainger says he hopes to be able to build a home for them on the property it acquired from the Monorail Project at 1600 West Armory Way. The broker for the GM Nameplate deal was Tim Foster of Colliers International.

The West Armory Way site currently has a 45-foot height limit. Ainger told GlobeSt.com earlier this month that the plan is to lease out vacant space on a short-term basis while redevelopment options are evaluated. The company plans to seek an increase in the height limit and approval for big-box retail.

“We’ve got several prospects; the only way to make [a redevelopment] make sense is to have retail,” Ainger said. “We’re looking at least two years before a groundbreaking.”

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