1000 station drive€¦ · sale for $5,200,000. the ownership will review offers as received....

1000 Station DriveOFFERING MEMORANDUM

DuPont, Washington | DuPontOffering.com

Kidder Mathews | 1000 Station Drive | DuPontOffering.com 2

1000 Station Drive

OFFERING MEMORANDUM

Jason RosauerSenior Vice President, [email protected]

Evan ParkerSenior Vice President, [email protected]

Amy Evans, J.D. Vice [email protected]

Exclusively represented by

kiddermathews.com

DuPontOffering.com

Rob Anderson, J.D. First Vice President, [email protected]

The information contained in the following Offering Memorandum is intended to be reviewed only by the party receiving it from Kidder Mathews and should not be made available to any other person or entity without the written consent of Kidder Mathews.

This Offering Memorandum has been prepared to provide summary, unverified information to prospective purchasers, and to establish only a preliminary level of interest in the subject property. The information contained herein is not a substitute for a thorough due diligence investigation. Kidder Mathews has not made any investigation, and makes no warranty or representation, with respect to the income or expenses for the subject property, the future projected financial performance of the property, the size and square footage of the property and improvements, the presence or absence of contaminating substances, PCB’s or asbestos, the compliance with State and Federal regulations, the physical condition of the improvements thereon. The information contained in this Offering Memorandum has been obtained from sources we believe to be reliable; however, Kidder Mathews has not verified, and will not verify, any of the information contained herein, nor has Kidder Mathews conducted any investigation regarding these matters and makes no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. All potential buyers must take appropriate measures to verify all of the information set forth herein. We make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Recipient of this report must verify the information and bears all risk for any inaccuracies.

Table of Contents

01 Executive Summary

02 Property Description

03 Location Overview

04 Market Information

Kidder Mathews 601 Union Street Suite 4720 Seattle, WA 98101


Executive SummaryThe Offering

Offering Process Property Overview

01


Executive Summary

The Offering

Kidder Mathews is pleased to present the 1000 Station Drive offering for sale in DuPont, WA. Located in Pierce County between Tacoma and Olympia with visibility from I-5, this offering consists of a beautifully maintained 20,500 SF office building with significant surface parking surrounding the building. Built in 2002, the building has long been owned and occupied by the Better Business Bureau, which is in the process of moving their operations. Along with the second floor office space occupied by the Better Business Bureau, several other long term tenants occupy suites on the ground floor providing a prospective buyer with existing, stable cash flow and an ability to either occupy or add value by leasing the top floor.

Located along I-5 with excellent visibility to the 111,000+ daily commuters, this property is 30 minutes from Tacoma to the north and 20 minutes from Olympia to the south. With Joint Base Lewis-McChord surrounding the area, over 200,000 active and retired military personnel and family live in and around DuPont creating a healthy, and stable, economic environment.

Offering Process

The 1000 Station Drive offering presents a unique opportunity for either an owner / user or an investor to acquire a meticulously well-maintained office building in a high growth market. This offering is being presented for sale for $5,200,000. The ownership will review offers as received.

PROPERTY OVERVIEW

Property 1000 Station Drive Offering

Address 1000 Station Drive, DuPont

Parcel(s) # 300050-003-1 Pierce County

Buildings One (1)

Stories Two (2)

Total Gross Building Size 20,517 SF

Total Land Area Size 77,782 SF

Parking 81 free surface spaces


Property DescriptionInvestment Highlights

Site Overview Building Information

Floor Plans Elevations

Tenancy / Rent Roll

02


INVESTMENT HIGHLIGHTS

Cash flow from long term, stable tenants

Excellent access to I-5 and visibility to over 111,000 daily commuters

Substantial amount of surface parking

Close proximity to Joint Base Lewis-McChord

Well-maintained building on beautifully-manicured site

Low operating expenses and minimal management required

Building situated on the only land zoned for office use in DuPont


Total Gross SF 20,517 SF

Net Rentable First Floor Net Rentable Second Floor Total Net Rentable

9,444 SF 9,534 SF 18,978 SF

Year Built 2002

Foundation Reinforced concrete slab-on-grade

Interior & Exterior Walls Wood framed

RoofWood frame hipStanding seam metal cover

CeilingSuspended acoustical tiles with recessed lighting fixtures in most areas

Floor Combination of carpet, ceramic, or vinyl tiles

PlumbingMulti-fixture men's and women's restrooms on each floor

HVAC Units mounted in attic

Fire Suppression Wet fire sprinkler system

72,782 SFTOTAL LAND SIZE

18,978 SFTOTAL NET RENTABLE

81TOTAL PARKING STALLS

Address 1000 Station Drive, Dupont, WA

Site Area 72,782 SF

Frontage 273 Lineal Feet along right-of-way of I-5

Parking81 paved & striped stalls 4.05:1,000

Visibility From Northbound and Southbound I-5

Land-to-Building Ratio 3.55:1

Site Overview Building Information


Floor Plan - First Level


Floor Plan - Upper Level


Elevations

WEST FACING

SOUTH FACING NORTH FACING

EAST FACING


SUITE Tenant Name SF Occupancy Start Lease Start Lease End Lease TermSecurity Deposit

Monthly Rent

Monthly Cam

Annual Rent Total

100 Farmer's Insurance 1,177 4/17/2017 4/17/2017 4/18/2022 60 months $2,450.00 $2,450.00 N/A $29,400.00

110 BBB - Vacating 5,827

130 Morris Management 940 6/1/2012 3/30/2012 8/31/2021 39 months $1,620.53 $1,770.80 N/A $21,249.60

140 Subway 1,500 7/1/2002 5/1/2017 4/30/2019 24 months N/A $3,000.00 $1,077.50 $48,930.00

200 BBB - Vacating 9,534

Tenancy / Rent Roll


Location OverviewDupont Overview

Joint Base Lewis-McCord Amenities

Public Transit / Traffic Count

03


Location Overview

Dupont

In recent years, DuPont has undergone a modern transformation, shifting towards a planned community. This community has a central focus on maintaining a balance of housing, jobs, and services, while emphasizing economic development. The success of this community can be attributed to tactical community planning, and sensible financial practices put in place by DuPont’s city officials. The growth in population is not to be overlooked; from 588 residents in 1995 to 9,497 in 2016, it is clear there is a draw to this peaceful, yet convenient community.

DUPONT STATISTICS

Most of the city’s governance capacity is shifting towards economic development

In 1995, DuPont had a population of 588. The population in 2016 was 9,497.

Finance, insurance, and real estate are the city’s largest sector, dominating 35% of employment for the last decade

DuPont’s unemployment rate is 2.5%, compared to Washington state’s 4.5%

In 1995, there were a total of 233 housing units—2015 counted 3,166 units

DuPont is particular about zoning—1000 Station Drive is just one of two areas zoned for office

The US military is a major contributor to DuPont’s economy. JBLM & Madigan Army Medical Center employ 63,000 civilian and military personnel.

Military personnel account for the largest portion of DuPont’s residential population, with that trend on track to grow

DuPont is part of a regional collaboration garnering legislative supports to secure funding to address congestion along the I-5/JBLM corridor.

In January 2018, two Amazon distribution centers settled in DuPont

93.9% of DuPont’s residential housing is occupied


Location Overview

Joint Base Lewis-McChord

Joint Base Lewis-McChord (JBLM) is just 11 miles away from the 1000 Station Drive offering and is the fourth largest military base in the world. The United States’ Army Fort Lewis base merged with United States’ Air Force McChord Air Force base to form Joint Base Lewis-McChord in 2010. The base has four medical facilities on site and serves 209,000 active and retired military personnel and their families. The Northwest Joint Regional Correctional Facility houses minimum to medium security prisoners.

Joint Base Lewis-McChord is the largest public employer in Pierce County

The combination of military personnel, family members, and retired veterans bring the collective population of JBLM to 209,000—or 24% of Pierce County’s 2015 population

120,000 retired veterans

Fourth largest military base population in the world—209,000

Largest land area military base in the United States—645 square miles

In 1995, there were a total of 233 housing units—2015 counted 3,166 units

There are just over 6,000 housing units on the JBLM base, presenting additional nearby housing needs

10 early learning centers, 3 elementary schools, 1 middle school, and 1 high school

JOINT BASE LEWIS-MCCHORD STATISTICS


Amenities

123

5

6 78

9

10 1112

13

14

15

12

348

9

11

12

13

14

15

16

17

10

7

6

5

1

3

4

5

6 7

8

9

1112

13

14

15

2

1000 STATION DRIVE

410

NISQUALLY REACH

POVERTY BAY

EAT + DRINK1. Starbucks

2. Subway

3. Viva Mexican

4. Pizza Hut

5. Farrell's Pizza

6. McNamara's Pub & Eatery

7. Emerald City Smoothie

8. Samuel Adams Brewhouse

9. Quiznos

10. Koko Teriyaki

11. Fortune Cookie

12. Super Buffet

13. Bruceski's Buffalo Wings & Pizza

14. Golf House Grill

15. Qdoba Mexican Grill

LIFESTYLE1. DuPont Nails & Spa

2. Jiffy Lube

3. DuPont Cleaners

4. Pure Elegance Spa

5. DuPont Barber & Beauty

6. Enterprise Multimedia Center

7. Auto Skills Center

8. French Theatre

9. The Home Course Golf Course

10. Eagles Pride Golf Course

11. Jensen Family Health & Fitness Center

12. Bowl Arena Lanes

13. AMC Lakewood Mall 12

14. Chamber's Bay Golf Course

15. Regal Cinemas

SHOPPING/GROCERY1. DuPont General Store

2. DuPont Cigar & Liquor

3. Chevron

4. DuPont Grocery Inc

5. Verizon Wireless

6. Pet Brigade

7. DuPont Health Market Pharmacy

8. DuPont Post Office

9. FedEx

10. Albertson's

11. Cabela's

12. Costco

13. Target

14. Martin Village Shopping Mall

15. Walmart Supercenter

16. Winco Foods

17. Fred Meyer

ROY

LACEY

LAKEWOOD

DUPONT


Public Transit / Traffic Count Aerial

1,792+ DAILY

11,5

40+

DAI

LY

12,000 + DAILY

KEY

Bus Route #592

N

111,837 + DAILY

LAKEWOOD 14 Minutes Away

LACEY 15 Minutes Away

1000 STATION DRIVE

Barksdale Ave

Dup

ont -

Ste

ilaco

om R

d

Clark Rd

Pendleton Ave


Market InformationPierce County Overview

Demographics Office Land Sales Comparables

04


After eleven consecutive quarters of positive net absorption in the Pierce County market, the streak was continued in Q1 2018, with barely 508 SF. The vacancy rate moved up slightly to 6.36% from 6.33% at year-end 2017. Tacoma CBD’s vacancy rate increased from 5.7% last quarter to 6.1% currently while the availability rate shot up from 7.8% last quarter to 11.8% currently, an increase of 400 bps over the last three months. This increase is on the heels of State Farm’s announcement in early 2018 that it will close its two Tacoma offices by the end of the year, potentially putting 800 people out of work. State Farm’s Tacoma operation is split between offices at the Frank Russell Building and Columbia Bank Center, where approximately 1,400 are employed. Some of the jobs will be relocated

to DuPont. Despite the State Farm announcement, the Tacoma CBD continues to see improved office and residential demand. Rental rates in the Pierce County remain relatively flat with a slight increase up to $22.26 / SF / year in Q1 2018, compared to $22.15 / SF / year last quarter. Sales in this quarter were active, but primarily smaller properties for owner / users or for redevelopment. After seeing only four office sales over $5,000,000 in all of 2017, the slow pace continued into Q1 2018. Optimism remains prevalent surrounding the CBD which continues to gentrify the strong interest in downtown housing, including new multifamily for professionals working in downtown Tacoma. The strongest office market segment in Pierce County continues to be medical - related properties.

Market InformationPierce County Market Overview

5 MILE RADIUS OF CLASS A & B OFFICE BUILDINGS FROM STATION DRIVE OFFERING*

PIERCE COUNTY OFFICE MARKET ANALYTICS

1st Quarter 2018 | 3kiddermathews.com

tenants that tend to be stable in size and without much need for expansion. No companies have been found as a replacement for the formerly Boeing occupied space in this submarket that has created the surplus in office inventory. The former 342,000 s.f. Weyerhaeuser office campus also continues to contribute to the higher Southend vacancy, although there has been some leasing activity of late. The current rental rate quote is $27.72/s.f./year full service compared to $26.32/s.f./year in 4Q 2017. Sales this quarter included only two office building sales over $5M, and the disposition of Boeing’s Duwamish Towers for redevelopment. Traditionally this market has taken the longest to recover, often serving as a secondary alternative to tenants that are priced out of Seattle and Bellevue.

Snohomish County ReviewAfter posting negative 218,027 s.f. of net absorption during 2017, the Northend office market rebounded in Q1 2018, with positive net absorption of 119,328 s.f. The vacancy rate also compressed from 7.59% at year-end 2017 to 6.86% after the first three months of 2018. Contributing to the positive absorption was a flurry of new leasing activity in the Bothell submarket after Boeing’s exodus of more than 100,000 s.f. The Bothell submarket ended the first quarter 2018 at 8.8%, compared to 12.9% at year-end 2017. The Everett CBD continues to perform steadily with a current vacancy of 6.1% (8.0% availability) compared to 6.9% at year-end 2017. The Lynnwood/Edmonds submarket remains one of the stronger Northend office submarkets with vacancy continuing to hover just above the 5.0% benchmark at 5.4%. The Northend submarkets continue to attract smaller office tenants looking for both proximity to more affordable housing for its employees and affordability with the average rent quotes running $14.62/s.f./year lower than Seattle running $11.75/s.f./year lower than the Eastside. The current asking rate for the Northside is $25.21/s.f./year which is a 1.4% increase from last quarter and 6.0% increase from a year ago. The most significant Snohomish County sale was the March 2018 acquisition of the Redstone Corporate Center I and Redstone Corporate Center II buildings in Lynnwood and Mountlake Terrace, respectively by Westport Capital Partners. The closing price of $70,750,000 indicates the buyer paid $215/s.f. for these Northend assets. Overall, the sales activity has been steady in the Northend market with a mix of investment and owner-user purchases. Gradually declining vacancy is expected.

Pierce County ReviewAfter eleven consecutive quarters of positive net absorption in the Pierce County market, the streak was continued in Q1 2018, with barely 508 s.f.

The vacancy rate moved up slightly to 6.36% from 6.33% at year-end 2017. Tacoma CBD’s vacancy rate increased from 5.7% last quarter to 6.1% currently while the availability rate shot up from 7.8% last quarter to 11.8% currently, an increase of 400 bps over the last three months. This increase is on the heels of State Farm’s announcement in early 2018 that it will close its two Tacoma offices by the end of the year, potentially putting 800 people out of work. State Farm’s Tacoma operation is split between offices at the Frank Russell Building and Columbia Bank Center, where approximately 1,400 are employed. Some of the jobs will be relocated to DuPont. Despite the State Farm announcement, the Tacoma CBD continues to see improved office and residential demand. Rental rates in the Pierce County remain relatively flat with a slight increase up to $22.26/s.f./year n Q1 2018, compared to $22.15/s.f./year last quarter. Sales in this quarter were active, but primarily smaller properties for owner/users or for redevelopment. After seeing only four office sales over $5,000,000 in all of 2017, the slow pace continued into Q1 2018. Optimism remains prevalent surrounding the CBD which continues to gentrify the strong interest in downtown housing, including new multifamily for professionals working in downtown Tacoma. The strongest office market segment in Pierce County continues to be medical-related properties.

%SF

VacancyNew Construction

1Q18

Net Absorption Average Rent (Median)

YE17YE14 YE15 YE16

-200K

0

200K

400K

600K

800K

1.0M

1.2M

-2.0%

0%

2.6%

4.9%

7.1%

9.4%

11.7%

14.0%

$21.03$21.41

10.65%

12.02%

$27.72

11.40%

9.42%

$26.94$27.29

10.90%

SOUTH KING COUNTY

%SF


1Q18


YE17YE14 YE15 YE16

-300K

-200K

-100K

0

100K

200K

300K

400K

500K

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

$22.58$23.00

7.29% 7.59%

$25.21

8.45% 8.37%

$23.58

$24.86

6.86%

SNOHOMISH COUNTY

%SF


1Q18


YE17YE14 YE15 YE16

0

50K

100K

150K

200K

250K

300K

350K

0%

1.4%

2.9%

4.3%

5.7%

7.1%

8.6%

10.0%

$20.38 $20.83

$21.64 $22.15 $22.26

9.70% 8.51%

7.46%

6.33% 6.36%

PIERCE COUNTY

Total Properties 23

Existing SF 1,160,014

Vacancy 0.2%

Gross Asking Rents $20 - $25 PSF

*Per Costar - 5/23/2018


1 Mile 3 Miles 5 Miles

Population 4,962 23,857 41,356

Average Household Income $80,728 $77,465 $71,402

Median Home Value $295,781 $292,687 $271,812

Renter-Occupied Median Rent $1,272 $1,315 $1,085

Demographics

5 MILES

3 MILES

1 MILEDUPONT

LAKEWOOD

HILLHURST

CLARKSDALE

BEACHCREST

LACEY

PUGET SOUND

1000 STATION DRIVE


Office Land Sales Comparables

NO. BUILDING / ADDRESS SALE DATE SALE PRICE PRICE PSF CAP RATE BUILDING SIZE

1Chaffey Building 1804 W Union Avenue, Tacoma

Nov - 17 $1,990,000.00 $238.32 8,350 SF

24441 Pacific 4441 Pacific Avenue SE, Lacey

Oct - 16 $2,900,000.00 $252.88 11,468 SF

3Lumberman's Former HQ 3020 Wilamette Drive NE, Lacey

Oct - 16 $2,850,000.00 $166.71 17,096 SF

4DSHS Building 1301 E 72nd Street, Tacoma

Nov - 17 $6,000,000.00 $200.00 7.63% 30,000 SF

5Plaza 10437 10423 - 10427 Pacific Avenue S, Tacoma

Pending $2,800,000.00 $245.18 6.25% 11,420 SF

6Girl Scouts Building 1000 Davis Place, Dupont

Available $5,250,000.00 $263.79 19,902 SF

7Johnsborough Station 1601 - 1625 E 72nd Street, Tacoma

Available $3,700,000.00 $291.66 5.47% 12,686 SF


LACEY

LAKE UNION

TACOMA

LAKEWOOD

DUPONTSPANAWAY

PUYALLUP

1

2

5

47

3

6

Office Land Sales Comparables

1000 STATION DRIVE

NISQUALLY REACH

CARR INLET


FREMONT CUT

Exclusively represented by

Jason RosauerSenior Vice President, [email protected]

Rob Anderson, J.D.First Vice President, [email protected]

Evan Parker Senior Vice President, [email protected]

Amy Evans, J.D. Vice [email protected]

DuPontOffering.com

kiddermathews.com

1000 station drive€¦ · sale for $5,200,000. the ownership will review offers as received....

Documents