By Meghan Hall
Even private investors are jumping into the Puget Sound commercial real estate market, as shown by a recent retail sale in Seattle. In a deal that closed on September 13th but just recorded, a Sprouts Grocery and HomeGoods on Aurora Ave. N. sold for $25 million. Public records indicate the buyers are affiliated with ANYU LLC and private individuals based in Millbrae, Calif.
The seller of the asset is an entity affiliated with Kitchell, a family-owned contracting business based in Phoenix. Capital Pacific, along with Mattis Partners, worked to broker the sale of the asset.
The two buildings are located at 13010 and 13020 Aurora Ave. N., and the deal contained two parcels. The larger parcel at 13010 Aurora, totals 3.43 acres and was developed with a 50,0083 square foot building originally constructed in 1997. The second parcel is smaller; At 0.38 acres, King County Assessor’s data shows that it is completely undeveloped and is used as a parking lot.
“We are pleased to participate in the revitalization of the area; in this case, with the transaction covering the sale of a converted former national grocer’s space to Sprouts and Homegoods stores,” said Capital Pacific in a statement to The Registry. “This part of Seattle continues to show tremendous growth and renewal.”
The shopping center sits within a heavily commercial part of the Haller Lake neighborhood. Other nearby retailers include Teriyaki & Pho, Chick-fil-A, V House Noodle, Office Depot and Friendship BBQ. Aurora Stadium and UW Medical Center Northwest are also nearby.
Retail fundamentals have improved as the second quarter saw Washington State and Seattle reopen after 15 months of pandemic-related restrictions. Direct vacancy decreased to 2.96 percent, as smaller tenants have been helped by government assistance programs. The 12 month absorption between Q2 of 2020 and 2021, however, was still negative at 31,000 square feet.
On a brighter note, rent growth continued to rise as well, increasing 4.3 percent year-over-year, according to recent data from Kidder Mathews. This rent growth is anticipated to continue. Investment sales are also continuing. During the second quarter, there were 49 retail sales of over $2 million. The average cap rate was 5.78 percent, and most of the deals were single-tenant deals with lease term remaining.