By Jack Stubbs
On Monday, September 18th, the 88,470 square foot Broadway Building in Tacoma sold for $17.25 million, or roughly $195 per square foot, according to public records filed with Pierce County. The buyer was 1102 Broadway Partners LLC, an entity associated with Arthur Wolfe located in La Center, Washington. The seller was an entity associated with Howard McQuaid of Kemper Development and two other investors, who purchased the building as a personal investment, according to an email from Matt Hermsen, principal at Flinn Ferguson Corporate Real Estate.
Located at 1102 Broadway in Tacoma, the Class B office building sits two miles to the east of Central Tacoma, near the southern edge of Commencement Bay. The property is positioned with easy access to prominent transit corridors, just a mile from access to Interstate-705 and roughly three miles from access to Interstate-5. Additionally, the Tacoma Light Rail station lies just a mile-and-a-half to the south of the property.
Comprised of five floors of office space, the building sits on a roughly half-acre lot. The rental rate for the space is $23-$25 per square foot per year, according to LoopNet. The web page for the property lists four vacant suites that total 11,701 square feet, or just over 13 percent vacancy. According to a CBRE leasing report attached with the web page, some of the property features include on-site parking in the building, prominent signage available, and floor plates of roughly 15,000 square feet.
According to a Q2 2017 office market report written by Kidder Matthews, the Pierce County Market extended the positive absorption seen in each of the past six quarters, with net leasing of roughly 11,900 square feet. The Pierce County vacancy rate fell slightly to 7.28 percent, and the availability rate fell by 40 base points to 10.6 percent. Additionally, the Tacoma CBD vacancy rate currently stands at 7.5 percent, down ten base points over the second quarter, while the availability rate has also fallen, currently standing at 8.2 percent. According to the report, the reason for lower vacancy rates—signalling higher demand—is a trend in the Tacoma CBD, characterized by a renaissance of office, residential and retail support. Rental rates in Pierce County were flat in the second quarter.