By Meghan Hall
A large redevelopment site in Eastern Redmond is up for grabs, a rare opportunity in the rapidly tightening Eastside markets. Called Park 188, the property totals 25.46 acres—1.1 million square feet—and possesses flexibility for a phased office or industrial development in the future, according to an offering memorandum obtained by The Registry.
Guidance pricing on the property was not immediately available. CBRE has been hired as the brokerage firm marketing the property for sale. CBRE declined to comment, stating that they could only disclose that they are marketing the property for sale.
According to public property documents, the parcel is owned by Cadman Gravel Company and is located at 188th Ave. NE. The parcel is currently used for mine and quarry operations. The appraised value of the property is about $28.9 million.
“The East Redmond site offers exceptional connectivity with its proximity to SR-520 and future light rail stations, offering easy access to east Bellevue and Seattle as well as north/south connections to Kirkland, Everett, Kent and Tacoma,” states offering documents. “The deep-water Ports of Seattle and Tacoma, the fourth largest container ports in North America, serve as vital links in the supply chain to Asian and Canadian markets.”
Numerous large-scale employers are within the immediate vicinity, including FedEx, Amazon, USPS, Microsoft and Google, among others.
The Eastside has seen increasing rates of development across all product types in recent years; according to CBRE, the Eastside industrial market has an availability rate of 3.8 percent. In all, the Eastside has about 25.3 million square feet of industrial space. The Redmond submarket is even tighter, with a 1.7 percent availability rate. The local office market is almost equally as tight, with vacancy at around 2.9 percent. CBRE predicts that these rates will remain low in the coming years due to a general lack of large-scale developable project sites.
Additionally, average asking rents for both industrial and office remain health. Industrial asking rents come in at $1.08 per square foot per month, almost equivalent to close-in Seattle rents. Office rents are also high, at about $43.07 per square foot per year.
The regional industrial market has continued to chug along during the second quarter. Much of the Eastside’s industrial inventory during the first quarter was absorbed by the region’s growing biotech industry; Lyell Immunopharma leased 72,500 square feet at Canyon Park East during the first quarter, while Barcoding Inc. took nearly 25,000 square feet at Ridgewood Corporate Park. Other major industrial tenants, such as Amazon, also continue to take space around the Puget Sound, driving large-scale demand.
Office activity on the Eastside has slowed since the end of 2019, notes CBRE. However, the pre-leasing of full buildings by large occupiers has helped to keep stability in the market, even though there was only 9,205 square feet of office absorption during the first quarter.
For both office and industrial, it is apparent that technology-based firms will continue to play a role in the health of the local commercial real estate market, even as COVID-19 prompts firms to adjust their everyday operations.