By Jack Stubbs
Redevelopment opportunities throughout the city of Seattle are at a premium, and a new transit-oriented development opportunity in Ballard—available for the future development of a multifamily, condominium, hotel or office project—is officially on the market.
Located at 1400 NW 56th St., the redevelopment opportunity comprises 1.93 acres, according to the offering memorandum released by CBRE. CBRE’s multifamily brokers in charge of the listing were asked not to provide comment about the redevelopment opportunity by their client.
The site, which is currently occupied by two freestanding buildings and surface parking, is currently occupied by two retail tenants, Ballard Market and Quality Sewing and Vacuum. The 2018 projected net operating income for the property is $627,217. The offering memorandum also highlights how the nearly two-acre redevelopment opportunity, located just north of Market Street and and Ballard Historical District, occupies a central location in the center of Ballard.
The two existing tenants have had a long-standing history at their current location. Begun in 1957, Ballard Market has stores throughout the Puget Sound region and the Ballard location was opened in 1986. Founded in 1985, Quality Sewing & Vacuum is one of 13 family-owned stores that operate throughout the Puget Sound region.
The property occupies an appealing location given its proximity to a future light rail station: the property is near the planned Ballard Link Light Rail Station, which will open its northern spur serving the Ballard neighborhood starting in 2035. The offering notes how the opening of the station in 2035, which aligns with the expiration of the tenants’ existing leases at the property in 2034, will provide riders with various employment opportunities: riders will be able to get from Ballard to Westlake in 15 minutes and will have easier access to Expedia’s World Headquarters, Seattle Center, South Lake Union and downtown Seattle.
The planned expansion of the light rail system has been awhile in the works. The Sound Transit 3 ballot measure—which proposed the construction of 62 new miles of light rail to form a 166-mile transit system—was approved by Central Puget Sound region voters in November 2016. Per the ST3 plan, the Ballard Link Extension, which will be located along NW Market street, will provide light rail service from Ballard’s Market Street area through downtown Seattle via both tunneled and above-ground rails, according to Sound Transit’s web site.
Along with the transit-oriented redevelopment opportunity, there have been a number of other multifamily apartment sales and in-the-works developments approved over the last few months indicating that activity in the North Seattle neighborhood shows little signs of slowing.
In mid-February 2018, construction began on Regency Centers’ Ballard Blocks II, a 114,000 square foot shopping center slated for completed in the middle of 2019. The mixed-use development, located at 1451 N.W. 46th St., will be across the street from Regency Centers’ Ballard Blocks project, a 131,000 square foot shopping center that contains a Trader Joe’s, LA Fitness and Ross, among other tenants. The new project will include a 25,000 square foot PCC Community Markets store (the anchor tenant in the space), 25,000 square feet of space dedicated to retailer West Marine and a 12,000 square foot childhood Early Learning Center. Additionally, there will be two floors of office space on the fourth and fifth floors that total 25,000 square feet, which the Seattle office of JLL is helping to lease. The development will also include 310 parking spaces and a rooftop amenity area.
More recently on May 14th, a 171-unit project that Carmel Partners is developing—located at 2417 NW Market St., less than a mile from CBRE’s transit-oriented development opportunity— was approved at an Early Design Guidance meeting.
In terms of recent apartment sales, on May 17th, the 26-unit Stanton Apartments in Ballard sold for $10.1 million, or approximately $388,416 per unit. The buyer of the asset was Stanton Condominiums LLC, an entity affiliated with Las Vegas-based developer The Midby Companies. and the seller was Bridgeview TPG LLC, an entity affiliated with Dave Enslow of Seattle-based Timberlane Partners.
And on June 19th, J.P. Morgan’s asset management division acquired the 6-story, 132-unit Modera Ballard Apartments located at 2003 NW 57th St. from Dallas-based homebuilder Mill Creek Residential for $60.25 million, or approximately $456,439 per unit.
According to an April 2018 Seattle Multifamily report written by Yardi Matrix, the multifamily market in Seattle’s Ballard neighborhood shows little signs of slowing. The neighborhood ranks 14th out of 42 Seattle submarkets, and rental rates in the neighborhood have increased 2.7 percent year-over-year as of April 2018, at which point the average rental rate was $2,020.
Additionally, there are currently four under-construction properties in the neighborhood that have expected completions between third quarter 2018 and first quarter 2019. These include Lennar Multifamily Communities’ The Valdox, a 178-unit project located at 1701 NW 56th St. and another 164-unit project located at 1718 NW 56th St.; Auctus Capital Partners Etta project, a 75-unit building located at 1710 NW 57th St.; and Calhoun Properties’ Riano, a 74-unit project located at 5611 17th Ave. NW. There are another four properties comprising 295 units currently in the preliminary planning stages, according to the report.