DUKES ON ALKI
MIXED-USE BUILDING INVESTMENT FOR SALE 2516 ALKI AVE SW, SEATTLE, WA
KIDDER.COM 01 INVESTMENT SUMMARY TABLE OF Investment Highlights CONTENTS 02 LOCATION OVERVIEW West Seattle Employment Map Location Aerial Demographics EXCLUSIVELY LISTED BY 03 TENANT PROFILE
JASON MILLER BOB CONRAD, CCIM Vice President Senior Vice President 206.296.9649 425.922.2647 [email protected] [email protected] KIDDER.COM
The information contained in the following Marketing Brochure is proprietary and strictly confidential. It 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 Marketing Brochure 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, or the financial condition or business prospects of any tenant, or any tenant’s plans or intentions to continue its occupancy of the subject property. The information contained in this Marketing Brochure 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. This information has been secured from sources we believe to be reliable. 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. 01 INVESTMENT SUMMARY
INVESTMENT HIGHLIGHTS
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 3 $4,450,000 PRICE INVESTMENT HIGHLIGHTS
6,500 SF building with two 5.4 % CAP RATE tenants DUKES RESTAURANT NNN LEASE RESTAURANT 5,100 SF (Dukes) 10 YEARS remaining on lease APARTMENT 1,400 SF (expires Jan 2031) APARTMENT PRO-FORMA LEASE 6,500 SF BUILDING WITH TWO TENANTS $240,732 Total Year 1 NOI $198,732 current NOI 1 YEAR lease ZONED NC 1-40 2% annual base rent $42,000 pro-forma NOI 10 YR ICONIC LOCATION on Alki Beach TWO 10-year options to renew PARKING on-site, one stall RESTUARANT LEASE
APARTMENTDUKES BUILDING ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 4 02 LOCATION OVERVIEW
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 5 T-MOBILE NORTH SEATTLE PARK BEACON HILL CBD WEST SEATTLE BRIDGE CENTURYLINK FIELD HARBOR ISLAND ELLIOTT PUGET PARK BAY WEST SEATTLE GOLF COURSE
HIAWATHA PLAYFIELD HAMILTON WEST VIEWPOINT PARK SEATTLE
ALKI AVE SW COLLEGE STREET RAVINE SCHMITZ PRESERVE PARK
DUKES ALKI AVE SW ON ALKI
ALKI BEACH ALKI PLAYGROUND & WHALE TAIL PARK
ALKI AVE SW
BAR-S PLAYGROUND
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 6 LOCATION OVERVIEW
bungalows nestled between newer condominiums and apartment buildings along Alki Avenue. Alki Point in West Seattle is considered to be the founding point of Seattle, before downtown was moved to its current location. Each year, the summer regional, month-long WEST SEATTLE Seafair celebration commences with a reenactment at Alki Beach that West Seattle is a vibrant commemorates the landing of the neighborhood located just five original explorers in 1851. miles southwest of Downtown Seattle, to the west of the Today, Alki is home to iconic eateries Duwamish River. The area is made including Spuds, which has been The Admiral District successfully up of several neighborhoods, serving fish and chips on Alki since combines a beautiful residential large parks, and beachfront with 1935, the upscale Salty’s waterfront area with ultra-hip businesses and views of the Seattle skyline and the seafood restaurant, Pegasus Pizza, unique culture. Patrons enjoy eclectic Olympic and Cascade Mountains. In Cactus, and Phoenicia. shops, boutique eateries, and the addition to appealing to downtown historic Admiral Theatre. Popular destinations include Metropolitan professionals, West Seattle attracts ADMIRAL DISTRICT residents that work in the south end Market, PCC Community Markets, at employers such as Alaska Airlines, The Admiral District lies on the Hiawatha Park, The Swinery, Prost!, Boeing, and Starbucks. northern bluff of the West Seattle and Luciano’s. peninsula (accurately titled the Duwamish Peninsula, after the local The park includes fire pits, picnic ALKI Indian tribe), less than two miles tables, and a bathhouse with an The Alki Ave Development Site are south of the Site. It is rich in views art studio.Throughout the summer located in the most sough-after and lovely old homes and maintains there is also beach volleyball, and neighborhood of West Seattle a lively restaurant trade. The Admiral regional volleyball tournaments across the street from Alki Beach District hosts their own events like are held there. The beach is also Park. Alki is known for its popular clean-up days, outdoor concerts, a venue for concerts and features beach vibe with arts-and-crafts community forums, and art walks. local artists.
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 7 affordable lease rates and its superior regional transportation SOUTH LAKE UNION options. Companies such as Blue Directly north of Downtown is THE JUNCTION Nile, HTC, Hulu, Intel, Payscale, and Seattle’s newest neighborhood, Rover.com are located in Pioneer South Lake Union. This Further south on the West Seattle Square. neighborhood has continued to peninsula is The Junction and the attract new jobs, residents, retailers, cross streets of California Avenue and visitors over the last several years. SW and SW Alaska Street. This SEATTLE CBD This includes life sciences research intersection and surrounding area Just 15 minutes from the Site, space, apartments, condominiums, is host to a myriad of restaurants, Seattle’s Central Business District retail establishments, and office cafes, and unique shops. A variety (CBD) is the Pacific Northwest’s developments. of events take place around The largest employment center which Junction, from monthly art walks accounts for nearly 300,000 jobs. South Lake Union is home to nearly to open-mic nights, beer and wine Major employers comprising 50,000 employees, and continues tastings, and seasonal events. West the CBD job market include to grow. The most significant Seattle’s year-round Sunday farmer’s Amazon, Bank of America, Blue employers are Amazon, which is market is held in The Junction, Nile, CenturyLink, Chase, Cobalt, currently expanding to over 13 featuring produce and offerings Dendreon, DocuSign, EA Sports, million square feet, the several from over 35 Washington State Facebook, Getty Images, Kaiser life sciences organizations such as farmers and local food processors. Permanente, HTC, Hulu, King Fred Hutchinson, a top ten cancer County, Microsoft, Nordstrom, research center in the nation, Onvia, Port of Seattle, Russell Seattle Biomedical Research, NBBJ, EMPLOYMENT Investments, Safeco Insurance, PATH, and Skanska. Other notable Starbucks, Swedish Medical Center, employers are REI’s flagship store, Tully’s Coffee, Twitter, University of PIONEER SQUARE Kaiser Permanente (formerly Group Washington, Virginia Mason, Vulcan, Health), and Whole Foods. Pioneer Square is the closest Washington State, Wells Fargo, and employment center to West Zillow. Seattle once residents cross the AMAZON West Seattle Bridge. The Pioneer In addition, companies such as Founded by Jeff Bezos in 1994, Square neighborhood is one of the Alibaba, Apple, HBO, Dropbox, Amazon is the global leader in largest concentrations of historic and Payscale have opened up e-commerce and cloud computing buildings in the nation. These offices in and around the Seattle with their world headquarters in buildings are being repurposed as CBD. Expedia is currently underway Seattle. Amazon’s cloud computing office space, with large companies with improvements on their future services are among the largest in the such as Weyerhaeuser and Avalara Seattle waterfront headquarters world, serving everyone from small moving into this up-and-coming which is slated to open in 2019. companies to large corporations employment hub. Several start-up Expedia’s new campus will bring and government agencies. In 2015, companies choose to lease space an estimated 4,500 jobs to the city Amazon surpassed Walmart as the in Pioneer Square due to the more once open. most valuable retailer in the U.S.
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 8 Amazon's Growth BOEING by market capitalization. Amazon Amazon’s rapid expansion and Boeing continues to produce the 737 out of their is the largest internet company hiring spree has aided the region’s Renton Factory, 15 miles south of the Site. The 737 is still in the world and the fourth most resurgence. In the past year, Amazon the best-selling commercial aircraft in the world. Boeing valuable public company in the added over 235,100 payroll jobs was also awarded the Navy’s Multi-mission Maritime world. Additionally, Amazon is worldwide. This staggering growth Aircraft contract and will build what is projected to the eighth largest employer in the a 40,000 square foot auditorium, has led Amazon to have a total be 300 of the new submarine hunters at the Renton United States. an Awareness Garden, and a worldwide employment force of plant. Boeing also produces the new 737 MAX out of neighborhood walking/jogging over 541,900, which is now bigger its Renton plant which is the fastest selling airplane in Amazon's Headquarters Expansion trail. The first two phases; 1.1 than local software giant Microsoft. Boeing’s history. With its first delivery completed in May In December 2012, Amazon million square feet each, have 2017, the new airplane already has over 4,000 orders. purchased three city blocks from the already opened. The final 1.1 million Amazon currently has approximately Clise Family in the Denny Triangle square foot phase is expected for 41,000 employees in Seattle. It is Boeing has gone on a building spree for its Next- along Westlake Avenue, between occupancy in 2018. Amazon’s estimated that Amazon will have Generation 737, recently increasing its production rate Sixth Avenue and Blanchard, for headquarters in Seattle’s South Lake room for 72,000 employees in from 42 planes per month up to 48 planes as of July $207.5 million. The site is now Union neighborhood has grown to Seattle by 2020. These new hires 2017. Boeing previously announced plans to produce home to their 3.3 million square include over 13 million square feet are typically younger millennials up to 52 planes per month by 2018. Boeing delivered foot expansion including three of leased and owned real estate with that have recently graduated from a record high 762 airplanes in 2015 and currently has office towers as tall as 37 floors, full occupancy expected by 2019. college. 5,700 orders for commercial airliners.
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 9 BOEING FIELD King County International Airport, also known as Boeing Field, is less than 15 minutes south of the Site. With a total of 594 acres, Boeing Field is one of the busiest primary non-hub airports in the country and supports over 5,200 direct jobs. The airport serves small commercial passenger airlines, cargo carriers, area, specialty care, and emergency rooms in Redmond private aircraft owners, helicopters, and Mill Creek, and over 100 primary care and specialty corporate jets, military, and other clinics that are compromised of the Swedish Medical aircraft. Group and relationships with suburban hospitals and physician groups. Boeing currently has operations at the airport, including final STARBUCKS preparations for 737s, flight test facilities, and a paint hangar. Starbucks got its start in 1971 at Pike Place Market in downtown Seattle with the intention of being a world-wide coffee roaster and retailer with the best SWEDISH – WEST SEATTLE coffee on the market. 45 years later, Starbucks is still Swedish Medical Center offers a operating their Pike Place Market storefront in addition primary care clinic in West Seattle, to over 26,700 locations around the world and is the less than 10 minutes from the Site. best-known coffeehouse chain globally. Starbucks’ The Swedish West Seattle Primary corporate headquarters is located less than five miles Care clinic offers several services, from the Site in Seattle’s SoDo neighborhood. ranging from family medicine to minor surgical procedures. In October 2015, Starbucks hired its first Chief Technology Officer to lead their technology team. Swedish Medical Center is an The company has been growing their technology team established regional healthcare which is based out of the Seattle headquarters ever provider, operating in the Seattle since. As of July 2017, 9% of U.S. purchases were made area for over 100 years. They are on customer’s mobile phones using the Starbucks app, also the largest nonprofit health up 50% from last year. Approximately 3,500 people provider in the Greater Seattle area, work at Starbucks’ Corporate office with approximately with five hospitals throughout the 1,000 in technology development.
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 10 TOP PUGET SOUND AREA COMPANIES PUGET SOUND
GREENWOOD
KIRKLAND
28 MINUTES UNIVERSITY DISTRICT 60,000 FREMONT 25 MINUTES EMPLOYEES 20,000 EMPLOYEES QUEEN ANNE 24 MINUTES SLU 60,000 QUEEN EMPLOYEES 26 MINUTES ANNE 4,500 EMPLOYEES SEATTLE CBD 23 MINUTES 113,400 LAKE EMPLOYEES WASHINGTON
DUKES ON ALKI
PIONEER 23 MINUTES SQUARE MERCER 70,000 ISLAND WEST SEATTLE EMPLOYEES
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 11 WESTFIELD SOUTHCENTER EDUCATION Education World University rankings To the southeast and less than 15 miles from the Site, for 2017. Westfield Southcenter is the largest shopping center in both Washington and the Pacific Northwest. The SOUTH SEATTLE COMMUNITY Founded in 1861, the UW consists of shopping center is owned by The Westfield Group COLLEGE three campuses offering almost 580 and is anchored by JC Penney, Macy’s, Nordstrom, Less than five miles southeast of degree options with over 46,000 and Sears. the Site and overlooking Elliott Bay students and 800 faculty and staff. lies the 87-acre campus of South It is the #2 public university in the In 2006, a $240 million renovation and expansion Seattle Community College. Among nation for receiving federal support added 400,000 square feet and two parking garages its popular and unique program in research and training totaling to the mall. Today, there are over 230 specialty offerings are nursing, aviation, $1.37 billion in 2016. SHOPPING & stores, 1,700,000 square feet of retail space, and a 16 culinary arts, horticulture, and screen AMC Theater, which includes an IMAX theater. For the 22nd time in 23 years, the wine making. The two-year college Southcenter’s annual 14.7 million shoppers and sales medical school was ranked #1 RECREATION also offers Bachelor’s degrees in per square foot make it one of the most successful among all schools in the country Just beyond West Seattle, Seattle’s hospitality management and retail outlets in the region. teaching, as well as transfer options for primary care by U.S. News and downtown shopping district is through its partnerships with City World Report. The UW is also known only 15 minutes from the Site. This University and Eastern Washington for its College of Engineering and district’s compact square of several ALKI BEACH University. the Michael G. Foster School of blocks includes brand name stores Besides the annual Seafair festival, Alki Beach is a Business. The graduate program like Nordstrom’s flagship store, popular destination for both tourists and Seattle area in computer science is widely Banana Republic, Barneys New York, natives alike. There are several unique restaurants UNIVERSITY OF WASHINGTON regarded as among the top ten Gap, J. Crew, Kate Spade, Macy’s, ranging from casual to gourmet dining. In the Located 20 minutes north of the programs in the nation. In fall 2016, Michael Kors, Nike, and Tiffany & summertime, the 135.9-acre beach park is filled with Site is the University of Washington 39% of UW students were pursuing Co., and Urban Outfitters. Fashion joggers, cyclists, roller bladers, and dog walkers. (UW). The UW is among the top at least one science, technology, boutiques like Anthropologie and higher learning institutions in the engineering, and mathematics Isadora’s Antique Clothing offer The park includes fire pits, picnic tables, and a nation and is ranked 11th globally (STEM) major and in 2015-16, the Seattle shoppers more eclectic bathhouse with an art studio. Throughout the summer by U.S. News & World Report and UW awarded 6,007 STEM degrees. options. Further south on Fifth there are beach volleyball and regional volleyball 4th in the nation among U.S. Public Nearly three-fourths of University’s Avenue, high-end retailers such as tournaments held there. The beach is also a venue Institutions on the Higher Times graduates remain in the state. Gucci can be found. for concerts and features local artists.
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 12 NEARBY RETAIL, DINING, & ENTERTAINMENT
ADMIRAL JUNCTION LINCOLN PARK 5 MIN Lincoln Park is five miles south of the Site. The 135-acre park includes trails, a paved walkway along the beach, baseball fields, tennis courts, ALASKA JUNCTION picnic shelters, a heated saltwater 9 MIN swimming pool, a wading pool, children’s play areas, and horseshoe pits. Throughout the five miles of MORGAN JUNCTION walkways and trails, walkers and and collectible shops, small family-owned restaurants, 11 MIN hikers can enjoy beautiful views of and one of the oldest head shops in Seattle. The upper the Puget Sound, marine wildlife, street level contains fishmongers, fresh produce stands, cargo ships and ferries, the beach, and craft stalls operating in the covered arcades. In July and the surrounding old growth 2017, the market opened their $74 million expansion, PIKE PLACE MARKET forest. the MarketFront, with 47 vendor stalls, a 300-stall 16 MIN parking garage, and 30,000 square feet of open space.
PIKE PLACE MARKET The Market is also known for its numerous eating WESTFIELD SOUTHCENTER MALL Located 15 minutes from the Site, and drinking options. Popular food establishments 22 MIN Pike Place Market is one of Seattle’s include the historic Lowell’s Restaurant, which has most popular tourist destinations been serving the public for almost 100 years, French with over 10 million visitors annually. bistro Maximilien, which was highly praised by Julia The Market overlooks Elliott Bay Child, Copacabana, Seattle’s only Bolivian restaurant, STARBUCKS WORLD HEADQUARTERS and is situated between Pike and and the Pink Door, a well-known Italian restaurant that 13 MIN Virginia Streets along 1st Avenue. became popular strictly by word of mouth and without The Market opened on August 17, the aid of using signage or advertising. Guests enter 1907, making it one of the oldest the restaurant into a nearly unmarked pink door on continually operating public farmers’ upper Post Alley. markets in the United States. It is a place of business for many small farmers, crafts people, merchants, TRANSPORTATION restaurateurs and famous street performers. West Seattle is served by several transportation options including King County Metro, the RapidRide Pike Place Market is comprised of bus system, Washington State Ferries with service eight different buildings, some of to Vashon Island and Southworth, the King County which are built on the edge of a Water Taxi, a passenger-only ferry service with service steep hill. The Market layout consists to the Seattle waterfront. The West Seattle Water Taxi of several lower levels located terminal is located less than one mile from the Site. below the main street. Each level For car commuters, the West Seattle Bridge connects features a variety of distinct shops the area with downtown Seattle and the surrounding such as antique dealers, comic book region via State Route-99 and Interstate-5.
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 13 West Seattle sits across Elliott Bay from Downtown Seattle and is the city’s largest neighborhood with over 80,000 residents.
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 14 NEIGHBORHOOD AMENITIES ELLIOTT BAY Dukes on Alki is a prime location for locals and tourists to relax, play, and enjoy all that a Northwest beach has to offer.
EAT + DRINK
1 Sunfish GROCERY + SHOPPING 2 El Chupacabra Alki 20 1 Safeway 5 6 3 Alki Spud Fish & Chips
2 Metropolitan Market 18 4 Cactus Alki Beach 2 DUKES 3 3 PCC Community Markets ON ALKI 5 Top Pot Doughnuts 17 21 4 Alki Surf Shop 22 6 Pegasus Pizza & Pasta 4 16 5 Admiral Junction 2 15 1 7 2 12 3 Alki Cafe 13 14 5 5 6 Zelda Zonk Consignment 3 7 11 SW ADMIRAL WAY 8 Pacific Room 1 6 9 2 19 7 Meeples Games 4 8 6 10 9 Starbucks 1 3 8 The Swinery 10 Il Nido WEST SEATTLE
11 It's BBQ Time 8 ENTERTAINMENT 12
Harry's Beach House CALIFORNIA AVESW 1 Homefront Smoothies & 1 Log House Museum 49TH AVESW 13 Ice Cream 2 Statue of Liberty Plaza - Seattle 14 Pepperdock 3 Admiral Theater 15 West Seattle Brewing Co.
16 Ampersand Cafe on Alki PARKS 7 SW CHARLESTOWN ST 17 Blue Moon Burgers 1 Schmitz Preserve Park
18 Mission Cantina 2 Whale Tail Park 55TH AVESW
19 Freshy's 3 Alki Beach Park
20 Mioposto Pizzeria 4 Me-Kwa-Mooks Natural Area N 21 Parliament Tavern 5 College Street Ravine
22 Circa 6 Hiawatha Playfield 4
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 15 DEMOGRAPHICS
UNIVERSITY 1 Mile 3 Mile 5 Mile 5 MILE RADIUS FREMONT DISTRICT POPULATION
2019 Population 13,720 58,283 280,277
2024 Projected Population 14,766 62,006 297,328 MAGNOLIA QUEEN 2019 - 2024 Annual Growth 1.5% 1.3% 1.2% ANNE 3 MILE RADIUS Median Age 42 40 37 CAPITOL HILL HOUSEHOLDS ELLIOTT BAY 2019 Households 6,841 28,078 150,645 SEATTLE Average Household Size 2.0 2.1 1.8 1 MILE RADIUS Average Family Size 2.8 2.9 2.9 DUKES ON ALKI HOUSING
Owner-Occupied Units 58.3% 52.9% 34.2% WEST SEATTLE BRIDGE WEST Rent Occupied Units 41.7% 47.1% 65.8% SEATTLE INDUSTRIAL DISTRICT Average Home Value $703,720 $623,462 $624,653
INCOME / EDUCATION
2019 Average Household Income $165,655 $129,346 $118,431
2024 Projected Household Income $187,780 $144,368 $131,524
Income Over $100K 57.1% 50.2% 45.2%
Bachelor’s Degree or Higher 68.8% 61.5% 61.1%
WHITE CENTER N
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 16 03 TENANT PROFILE
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 17 TENANT PROFILE
The Duke’s Chowder Houses are casual and unpretentious where comfort, cold beer, tasty cocktails and scrumptious food all come together. “Don’t let the casual Duke’s Seafood & Chowder has nature of the atmosphere mask come a long way since its humble the fact that at Duke’s our goal is and carefree beginnings in 1976 preparing world-class equal to any when Duke Moscrip broke away fine dining restaurant.” from his partnership in Ray’s Boathouse to start the original Duke’s Clam Chowder recipe soon Duke’s Bar & Grill at 1st Ave. West became a local favorite, but it and Thomas on Queen Anne, just originated with Duke’s grandfather two blocks from the Seattle Center. in New England, evolving over time and with tastes winning countless awards including the Seattle Fueled by the success of Duke’s Chowder Cook Off three years in a Bar & Grill, Duke’s Bellevue opened row. Seven other chowder flavors two years later, followed by Duke’s were spun from the original recipe 5th Avenue in 1985. It was in 1989 with more continually introduced. that the company made its biggest and best decision; they opened Menus expanded, more seafood the first Duke’s Chowder House introduced, broader selections took on South Lake Union followed hold with customers which lead to by Duke’s Green Lake Chowder a name change to Duke’s Seafood House in 1990, and finally Duke’s & Chowder. “The new name better Alki Chowder House in 2001. represents our menu today,” says Even though other concepts were Moscrip. “Chowder remains a started, Duke shifted his focus on mainstay, but it’s our adventurous the winning formula found in the and flavorful fish, chicken and beef Chowder House concept and thus, dishes that make Duke’s a local other locations to make way for favorite.” Currently Duke’s operates more Chowder Houses around the in seven locations area the Puget Puget Sound. Sound region.
DUKES ON ALKI OFFERING MEMORANDUM KIDDER MATHEWS 18 EXCLUSIVELY REPRESENTED BY
JASON MILLER Vice President 206.296.9649 [email protected]
BOB CONRAD, CCIM Senior Vice President 425.922.2647 [email protected]
KIDDER.COM