By Meghan Hall
Two aging commercial properties in the suburb of Kirkland, Wash., could be repositioned into for-sale housing after being scooped up by a national developer. In a deal that was finalized last week, Toll Brothers spent $40 million to acquire a pair of properties at 10801 and 10809 120th Ave. NE. Public records show that the seller of both assets was Alco Investment Company.
Alco originally acquired the properties back in September of 2020, based on previous reporting by The Registry. Alco paid $14.897 million for 10809 120th Ave. NE., which is home to Systima Technologies. According to assessor’s parcel data, the building totals 56,858 square feet and was originally constructed in 1966. The lot that the building sits on is also quite large, at 150,310 square feet, or 3.45 acres.
“The Eastside continues to grow at unprecedented trajectories across all real estate sectors and in this instance, Alco was fortunate to be the beneficiary,” said Lee & Associates’ Jim Reed, who helped Alco with its initial purchase and the latest disposition of the property. “We saw upside but didn’t anticipate such an expeditious turn around.”
Alco initially paid about $13.602 million for the second building located at 10801 120th Ave. NE. The asset totals 51,584 square feet and it sits on 7.65 acres.
Both parcels are designated as high tech/high-flex uses by the City of Kirkland and are just off of Interstate 405. While predominantly surrounded by single-family housing, the Lake Washington Institute of Technology and the Willow Creek Corporate Center. Downtown Kirkland, home to a number of firms, including Google, is also not far away.
The City of Kirkland currently has no plans on file for the redevelopment of the properties. However, Toll Brothers has built several other communities in the area, including 220 Towns at Canyon Park in Bothell, Stone Creek at Sammamish, The Ridge at Big Rock in Duvall, Wash., and more.
Founded in 1967, the firm is the 5th largest U.S. homebuilder by revenue, according to a first quarter report released by the company, with assets in 24 states and 60 markets. 10 new markets have been added since 2018 alone. During the first quarter of fiscal year 2022, Toll Brothers had $2.5 billion in available liquidity and generated approximately $1.2 billion in cash operations from the previous fiscal year. Its debt-to-capital ratio stood at 31.9 percent at the end of Q1.
The firm expects single-family housing fundamentals to remain strong, stating that there is an estimated shortfall of 6.1 million homes nationwide. The firm also notes that limited resale supply is driving buyers to the new home market, as will demographic trends. Remote work, migration, and mortgage rates will also play a factor in for-sale home demand in the coming months.