By Meghan Hall
An industrial asset in the Seattle neighborhood of South Park has traded hands, indicative of a continued desire by major investors to acquire well-located assets close to downtown. In a deal that was finalized on January 10th, a limited liability company associated with Brookfield Property Group purchased one such asset for $11.25 million, or about $305 per square foot. According to public records, the seller of the asset was RLE Properties LLC. The limited liability company is associated with private individuals from Mercer Island, Wash.
The property is located at 7700 2nd Ave. S. and is currently home to Pacific Western Agencies, Inc. Data from CommercialCafe indicates that the Class B building was originally constructed in 1979. In all, it totals 36,982 square feet and sits on 1.27 acres.
The asset is in a heavily commercial neighborhood. Other nearby businesses include Boyer Logistics, Fox Plumbing, Heating & Cooling, Electronetics, Alaskan Logistics and others. Directly across the Duwamish Waterway are Boeing offices and Seattle-Tacoma International Airport.
It is unclear what Brookfield’s plans are for the site. Seattle records do indicate that a land use analysis request was submitted to the City at the end of December. Records classify the property as a potential development site. However, no formal plans for redevelopment have been filed.
The local industrial market continued on its upward trajectory during the fourth quarter, with record high net absorption at over 13 million square feet, according to recent analysis by Kidder Mathews. The previous high was 6.8 million square feet in 2006. And, even though 3.15 million square feet was added to total supply, bringing the region’s inventory to 358 million square feet, vacancy still decreased to 4.4 percent. An additional 9.5 million square feet is in the construction pipeline, of which 62 percent is pre-leased.
Close-in Seattle had even better fundamentals. Vacancy declined to 3.6 percent and sales totaled $148 million. Other recent sales include Bain Capital’s acquisition of the North Coast Electric Building for $32 million, or about $376 per square foot, and the sale of The Gear Works Building for $10.5 million, or about $144 per square foot. This momentum in the market is expected to continue, as close-in assets near population centers remain in high demand amid e-commerce and online shopping growth.