By Jon Peterson
Washington, D.C.-based ACON Investments, a private equity firm, has placed on the market for sale the three-building property that includes the Funko headquarters office building in Everett. The asking price for the property is $52.9 million, according to sources familiar with the property. The property includes two office buildings and a standalone parking structure.
The seller has chosen the Seattle office of Kidder Mathews to be the listing agent on the sale. The main person working on the transaction is Dave Speers who is an executive vice president with the company.
Should the property reach the sales price, it would produce a six percent cap rate, as stated by sources aware that the asset is up for sale. The cap rate is based on the property’s existing net operating income. It is projected that there will likely be two types of investors interested in this property. The first group would likely be comprised of institutional capital sources that can acquire an asset of this size. Another group could be investors looking to utilize a 1031-Exchange.
The sale of the property includes three separate buildings totaling 279,243 square feet. All of the office space in the property is leased to the international toy company Funko with an existing lease that has another five to years remaining. One of the properties is the corporate headquarters home of Funko, which is located at 2802 Westmore Avenue. The property totals 98,698 square feet, and it is a five-story building. The current ownership estimates that Funko has spent more than $13 million in various tenant improvements.
A second office building in the sale is the 55,381 square foot Funko Westmore building located at 2731 Westmore Avenue. This is a four-story property, and it is undergoing a major renovation by Funko at an estimated cost of over $7 million. The work on the building is projected to be completed by mid-summer of this year.
The asset also includes a parking garage located at 2801 Westmore. It totals 125,164 square feet, and it is a four-story stand-alone parking structure with 397 parking stalls. The headquarters office building is connected via a skybridge on the third level of the garage.
The sale of the Funko asset would represent a trade of one of the largest buildings in this submarket market. The total amount of square footage in the Everett office market stood at 2.1 million square feet at the end of 2021, according to sources that track this data in the greater Seattle market. The total vacancy was 13.5 percent with the average asking rent on a gross basis of $24.98 per square foot per year.