By Jack Stubbs
Georgetown is a neighborhood in transition, and a property in the heart of the evolving area south of the industrial district recently changed hands, with the per square foot price setting a record for the neighborhood.
On Monday, May 14th, the high-tech/flex Hathaway Building in Georgetown sold for $12.25 million, or $306 per square foot, according to public records filed with King County. The buyer was Seattle Hathaway 75 LLC, an entity comprised of a local and out-of-town developer. The seller was Puget Properties LLC, a local real estate investment company.
Ross Klinger and Tim Foster with Kidder Mathews’ Seattle office are the brokers for the property. According to Foster, the PSF sales price was a record for Georgetown.
Puget Properties is making a significant profit on the asset, which it acquired in December 2013 for $4.59 million. According to Jeffrey M. Richey, managing partner and founder of Puget Properties, the sale of the property came at the right time. “When we bought the building, we renovated it and decided that if we were to get our price, we’d go ahead and sell….the timing made sense for us, and we’ll deploy our money in another investment that makes sense like this one did,” Richey said.
The transaction was for three adjacent parcels of land. The first parcel, located at 5506 6th Ave. S., contains the Hathaway Building, a two-story, 40,029 square foot high-tech office/industrial building constructed in 1982. According to Kidder Mathews’ marketing flyer for the property, the building was renovated in 2014, and has the potential for value-add by converting 6,500 square feet from warehouse space to office. The building also includes a conference room, on-site property manager and security system. According to Foster, the building is 100 percent leased to 13 different tenants. Some of these companies include the King County Police Officers Guild, Interior Design International and PB Architects.
The other two parcels included in the transaction comprise a combined 10,000 square feet of vacant industrial land, according to public documents.
Located in the heart of Georgetown, the property is roughly one mile south of the Industrial District and also sits adjacent to Boeing Field. Additionally, the property is approximately three miles from access to Washington State Route 509 and half a mile from Interstate-5.
Founded in 2003, Puget Properties focuses on the repositioning of underperforming commercial, industrial, mixed-use and multifamily real estate assets, and has developed a number of different properties around SoDo. According to Richey, the company’s purchase and subsequent disposition of the property fit into its overall strategy. “We look at underperforming assets to reposition them to their highest and best use,” he said. Richey thinks that given the current state of the active real estate market, the timing was right to let go of the asset. “We love the building, but, traditionally speaking, we’re in the seventh year of a pretty hot market, so it’s always good when you can sell near the top. The timing was everything for is on this [sale].”