By Jon Peterson
A Seattle-based private investor has placed on the market for sale the 45,126 square foot Pepper Hill Center retail shopping center in Shoreline. The asking price on the sale of the property is $25 million, or roughly $554 per square foot, according to the property’s offering document.
The seller has owned the property for a long time. It has chosen the Seattle office of Kidder Mathews to be the listing agent on the transaction. Those involved on the sale include David Speers and Dan Swanson, both executive vice presidents with the firm.
The sale of the property would represent a covered land investment opportunity for the new owner. In this scenario, the property would continue to generate income while the buyer plans a possible redevelopment for the site. According to the property’s offering document, the net operating income from the asset between April 2021 and March 2022 was $603,019.
The property as it stands now has an occupancy of around 90 percent. The last lease in the property does not expire until late in the year of 2025. The tenant with the largest space in the building is The Hidden Door, which has a lease of 5,162 square feet and that runs through February 2023. Another sizable tenant is Tandy Leather with over 2,382 square feet in a lease that goes away at the end of 2022. There also are a total of five tenants in the property that are on month-to-month leases.
It is likely that most of the interest in the property would come from development firms. The new ownership would probably pursue redevelopment of the property. The asset is located in an area that is zoned for mixed business under the City of Shoreline zoning code. This would allow for a wide range of uses including multifamily, office, hospitality, medical, lab and other commercial uses with no FAR limitation. The potential multi-family uses could be either apartments or maybe townhomes. The estimated multi-family massing for the parcel is around 627,000 square feet.
The physical address of the property is 14507 Aurora Avenue North. The total land size of the parcel is 3.6 acres. There is surface parking on the property now for around 100 stalls.
Pepper Hill Center will have some strong transportation options in the future. In the next two years, the Lynnwood Link light rail extension is planned for completion, which will provide connectivity across the region. The Shoreline South/148th Station will be located one mile away from the property. Right now, the Rapid Ride Bus is located adjacent to the center and it provides riders access to the central business district of Seattle, roughly seven miles away.