By Jack Stubbs
A city south of Seattle on the southern edge of Commencement Bay, Tacoma is an area on the move — an increasingly active multifamily market, a commercial market characterized by decreasing vacancy rates, and an extremely tight industrial market are all factors increasing the appeal and subsequent investment in downtown Tacoma, the Port of Tacoma and the surrounding areas of the city.
And a recent transaction indicates that interest in the city’s downtown office market continues. On Wednesday, April 24th, an office/medical building sold for $11.5 million, according to public documents filed with Pierce County. The seller of the property was Milwaukee, Wisconsin-based Physicians Realty Trust, a REIT company specializing in the healthcare industry.
The buyer of the property was Berschauer Group Inc., an Olympia, Washington-based construction company that specializes in commercial, healthcare, industrial and mixed-use projects throughout the Pacific Northwest.
Located at 1149 Market Street, the subject property is a five-story building that totals 172,773 square feet, with the fifth floor comprising 49,773 square feet of office space and the bottom four floors comprising a 123,000 square foot parking garage with 505 stalls. According to Berschauer Group’s web site, the property is home to a health consultant company called the Franciscan Health System Service Center, who has a long-term lease across three floors of the building.
The Berschauer Group’s recent acquisition of the office/medical property located at 1149 Market Street represents an expansion of the company’s presence locally in Tacoma, according to CEO and Principal Patrick Berschauer. “When we bought the Cornerstone plaza, the intent was over time to buy the Franciscan parking garage and reconnect [the two buildings] via a skybridge. Back in 1987, the two buildings used to be under one ownership…our goal was to put the parking garage back together with the office,” he said.
The company also owns the historic Cornerstone Plaza, a 99,279 square foot property across the street located at 1148 Broadway, which the company purchased from Regence Blue Shield in 2016.
Located just south of the Stadium District, the Franciscan Service Center is roughly two miles east of downtown Tacoma and proximate to access to Interstate-5 and State Route 509. The property is also about four miles south of the Point Ruston waterfront resort, which was the site of a large-scale transaction in third quarter of last year. In September 2018, California-based CWS Capital Partners acquired six different commercial/residential properties at the Point Ruston resort for a combined $101.3 million from Point Ruston Apartments LLC and Century Condominiums LLC.
The Berschauer Group’s business philosophy is based on a partnership model, and the company works closely with third-party clients, advisors, subcontractors and investment partners, focusing primarily on construction and construction management, according to the company’s web site. The company’s experience in the healthcare industry ranges from providing improvements to tenant clinic space to renovations, expansions for Public Health Districts, and ground-up construction of new hospitals.