By Meghan Hall
The Puget Sound commercial real estate market took no pause over the holidays, as a number of deals continued to close. In a rarer but notable transaction, MainStreet Property Group LLC purchased the Rose Hill Village Shopping Center in Kirkland, Wash., for $20.5 million, according to public records. The transaction was finalized on December 30th.
Ross Klinger, Eric Bissell, and Brad Bissell of Kidder Mathews worked to broker the deal. Public records show that the seller of the asset was Rosehill Village Shopping Center LLC, which is affiliated with a number of private investors.
The property is located at 12631 NE 85th Street and totals 16,000 square feet, according to an offering memorandum obtained by The Registry. The building sits on 3.42 acres. The property, according to the memorandum, is a “rare, institutionally-sized site.”
The asset is also zoned for repositioning; while also providing a lot of developable land, a recent tenant fire means that a portion of the building is already undergoing demolition. Current zoning allows for all product types, including apartments, condominiums, office, retail, senior living and townhomes. For mixed-use buildings with ground-level office or retail, new projects could rise up to 45 feet in height.
In the future, the property could serve to be a wise investment for MainStreet Property Group, given Kirkland’s growing demographics and its accessibility to downtown Seattle and other major business centers, such as Bellevue.
“Kirkland is acknowledged to be one of the most livable cities in the Puget Sound region and widely considered to be a top 3 submarket on the Eastside due to its proximity to Puget Sound’s major employment hubs and location, as the city is less than 10 miles away from Bellevue, Bothell, Mercer Island, Redmond, and Seattle,” the offering memorandum states.
Google is Kirkland’s second largest employer, while Microsoft’s headquarters in Redmond are only 2.3 miles away from the site. The presence of these companies, as well as many others such as Amazon and Oculus, whose parent company is Facebook, contributed to in-migration and rising salaries–both key components in a healthy economy and commercial real estate market. Currently, the average household income is $112,076 per year and is one of the highest in the area.
“Favorable demographic trends and strong demand from an existing tech workforce drive vacancy compression in Kirkland. These strong fundamentals have caught the attention of developers, and the submarket’s inventory has grown significantly,” states the memorandum. “Strong population growth and high incomes make Kirkland a popular destination for multifamily development.”
The city is also expected to continue on its upward trajectory as fundamentals continue to compress. Developers have also taken note. In the offering memorandum, Kidder Mathews notes that local developers have boosted multifamily stock by 13 percent between 2013 and 2018 alone. Other developments, like Lakeview Plaza, Kirkland Urban, the Totem Lake Mall and Kirkland South Park & Ride are also expected to contribute to the vibrancy of the area and activity at the site in the coming years.