By Kate Snyder
Olympia’s office market might soon see some sales transaction activity with the recent listing of two office properties that are occupied by the State of Washington. The two assets, Capitol View I and II, are offered for sale, according to marketing information from CBRE on behalf of the properties’ owner and developer, Vine Street Group. No pricing guidance has been provided, and a representative from CBRE was not immediately available for comment.
The properties are located at 712 Pear & 724 Quince Street SE. The two buildings total approximately 123,905 square feet, with Capitol View I measuring 70,000 square feet and Capitol View II at 53,905 square feet, marketing information shows. The buildings have seen recent upgrades with new elastomeric painting of building shells, window replacements and updated lobbies and interiors along with new HVAC rooftop equipment for Capitol View I, according to marketing documents.
Both are fully leased to the State of Washington’s Department of Social and Health Services. The current leases are each for 10-year terms, which expire in May 2029 and October 2030 with no appropriation clauses, and each including an additional five-year renewal option at market rents. Rent bumps of 9.3 percent for each building are scheduled to occur in 2024 and 2025 as part of the current leases.
“Capitol View I and II, as flagship buildings for the State, were built and engineered to their standards for a pre-planned, long-term occupancy,” the marketing information states. “Health care is a major focus for State Government with rapidly growing budgets and initiatives; the Department of Social and Health Services continues to grow in operational significance.”
The buildings are located near several area government and civic facilities, such as the headquarters of many major state agencies, the capitol campus and the state legislature buildings. Originally built-to-suit for the State of Washington, the properties have been continuously occupied since delivery in 1988 and 1990.
Vine Street Group is a Pacific Northwest, family-owned and operated, regional, development and investment building company, according to the company’s website. The company was founded in 1978 and it is primarily focused on owning, operating and leasing buildings to tenants with high credit quality characteristics like government entities. For decades, Vine Street Group has been a prominent developer and operator of state buildings in the market.
Last year, the firm offered for sale a portfolio of 24 office buildings totaling 1.35 million square feet with all but one building located in Olympia and Tumwater markets. The portfolio has a total of 19 properties spread across 24 buildings. The largest property in the Olympia group of buildings in the portfolio is the 161,200 square-foot Cherry Street Plaza property located at 626 8th Avenue Southeast. Nearly all of the properties in the portfolio were specific build-to-suit facilities for the State of Washington, and 15 of the properties are fully leased to the State.
