Confidential Offering Memorandum Exclusive Development Investment Opportunity $1,500,000 614-616 5Th Ave South Edmonds, Washington
Total Page:16
File Type:pdf, Size:1020Kb
Confidential Offering Memorandum Exclusive development investment opportunity $1,500,000 614-616 5th Ave South Edmonds, Washington 1 | 614 - 616 5th Ave S | Edmonds, Washington Table of contents 01 Investment summary 03 02 Market overview 09 CONTACT INFORMATION MARK THYGESEN ROB NIELSEN Vice President Executive Vice President Capital Markets - Investments Tenant Representation +1 206 607 1737 +1 206 607 1722 [email protected] [email protected] 2 | 614 - 616 5th Ave S | Edmonds, Washington 01 Investment summary 3 | 614 - 616 5th Ave S | Edmonds, Washington Investment summary The Offering JLL is pleased to exclusively present the opportunity to acquire a premium development site in downtown Edmonds, WA. The property consists of two parcels totaling 17,187 square feet of land with two buildings totaling 2,940 square feet of leasable space. The property is zoned Downtown Convenience Commercial which offers a wide variety of commercial and residential uses. The property boasts an infill location within Edmonds’ downtown commercial district. The local area is walkable, bike-able, conveniently accessible by transit and offers a thriving shopping experience with excellent local eateries throughout the downtown core. Currently the site has design review approval for plans to construct a two-story building, including a drive-thru retail space with second floor office space totaling approximately 7,087 square feet of gross square footage. INVESTMENT HIGHLIGHTS PROPERTY SUMMARY • Premium 5th Avenue South location, one of downtown 614 – 616 5th Ave South Address Edmonds major thruways. Edmonds, WA 98020 • High barrier to entry submarket with strong tenant Parcel Numbers 27032600100900; 27032600102900 demand, resulting in solid market fundamentals with over 5% market year over year rental growth. Product Type Office/Land/Retail • Supply constrained market with an office vacancy rate of Square Footage 2,940 / 7,087 just 2.7%. (Current / Proposed) • Current development plans that have received design Lot Size 17,187 SF Total review approval, which will significantly reduce the permitting and entitlement timeline. Year Built 1970, 1977 • Close proximity to major transit including Sound Transit Stations, Washington State Ferry system via Edmonds/ Occupancy Vacant Kingston Ferry, Amtrak Cascades rail station easy access Parking/Ratio TBD to SR 104 with direct access to Interstate 5. (Current / Proposed) Investment summary Property description Located in Downtown Edmonds the property benefits from approximately 130 feet Zoning of prominent frontage on 5th Ave South. The property is situated on two parcels Downtown Convenience Commercial - BD3 totaling 17,187 square feet of land with two commercial buildings totaling 2,940 square feet of leasable area. This zoning allows for a wide variety of commercial and residential uses to promote Downtown Edmonds as a setting for retail, office, entertainment and associated Just west of Interstate 5, Edmonds is conveniently located just 16 miles north of businesses supported by nearby residents and the larger Edmonds community, Seattle and 18 miles south of Everett, WA. The property offers lively pedestrian and as a destination for visitors from throughout the region. Maximum height limits activity in a bourgeoning marking with unique amenities such as several art are 30 feet and multifamily development is restricted to second floor or behind first galleries and performance halls, a historic downtown, sandy beaches and a strong 45 feet from sidewalk or rights-of-way. transit system via Sound Transit, Amtrak Cascades Rail Station and the Washington State Ferry System. 5 | 614 - 616 5th Ave S | Edmonds, Washington Investment summary 6 | 614 - 616 5th Ave S | Edmonds, Washington Investment summary Site summary SITE DETAIL Location 614 - 616 5th Ave S, Edmonds, WA 98020 Lot size 17,187 SF Parcel number 27032600100900, 27032600102900 # of buildings Two howell way Zoning BD3 EXISTING BUILDING SUMMARY - BUILDING 1 Location 614 5th Ave S Stories One 1 5th Ave S Ave 5th Year Built 1970 Lot Size 0.17 acres 4th Ave S Ave 4th 2 Building Size 990 square feet EXISTING BUILDING SUMMARY - BUILDING 2 Location 616 5th Ave S Stories One Year Built 1977 Lot Size 0.22 acres Building Size 1,950 square feet 7 | 614 - 616 5th Ave S | Edmonds, Washington Property overview Development option Currently the property has design review approval from the City of Edmonds for a two story, 7,087 square foot, office over retail commercial building. The property will include a new two-story office building with drive-through access on the 1st floor and approximate 3,479 square feet of leasable office space on the 2nd floor. DEVELOPMENT OPTION SUMMARY Height limit 30 feet Buildable SF 7,087 Units 2 8 | 614 - 616 5th Ave S | Edmonds, Washington Investment summary Development option site plan 9 | 614 - 616 5th Ave S | Edmonds, Washington Investment summary Development option site section 10 | 614 - 616 5th Ave S | Edmonds, Washington Investment summary Development option elevations 11 | 614 - 616 5th Ave S | Edmonds, Washington 02 Market overview 12 | 614 - 616 5th Ave S | Edmonds, Washington Market overview Area overview Mountlake Terrace Lake Washington Lake Ballinger yost park 614 5th Ave S Woodway Downtown Edmonds Edmonds City Park Puget Sound Edmonds - Kingston Ferry Terminal Port of Edmonds Marina 13 | 614 - 616 5th Ave S | Edmonds, Washington Edmonds office market o – 1 submarket profile Q2 2019 364,016 SF Total net absorption Inventory • • TheThe Edmonds Edmonds oceoffice submarketsubmarket is 364,016 s.f. 18,314 is comprised of 364,016 square 13,030 14,330 comprised of 364,016 square feet of Inventory feetassets of assets10,000 10,000square feetsquare and feet larger, 6,032 andexcluding larger, medical excluding and medical owner-user and owner-user buildings. 0 SF buildings. Under -2,804 -3,240 • Total vacancy dropped 950 basis construction0 s.f. -6,339 -8,960 -8,083 • pointsTotal vacancy since its dropped last peak 950 in basis 2012, Under construction SF -14,106 topoints the current since its rate last ofpeak 2.7 in percent, 2012, to 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Averagethe current asking rate ofrate 2.7%. is up Average 5.1 rents $26.86 Total vacancy rate percentare up 5.1% year-over-year, year-over-year, currently currently Average direct asking atat $26.86 $26.86 perper square foot, foot, full full service. 0 s.f. 12.2% service. rate (FS) 11.1% New delivery SF 10.5% 8.6% • • NetNet absorption absorption was negative negative through 5.8% 6.6% 6.1% throughthe first thehalf rstof 2018, half ofwith 2018, 7,629 square withfeet 7,629of space square put back feet on of the space market. 2.1% 2.7% +5.1% 0.5% putHowever, back on the the submarket market. remains very YOY$26.86 rent growth space constrained. Average direct asking rate • As it grows increasingly dicult 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 for tenants to nd available • As it grows increasingly difficult for Class A space in the Downtown Direct average asking rent ($ p.s.f.) tenants to find available Class A space Seattle and Eastside market, 1 in the Downtown Seattle and Eastside Available-8,083 Class A block $25.99 $26.23 $26.86 Edmonds could gain traction as $22.50 $23.01 $22.17 markets, Edmonds could gain traction $20.61 $20.82 $22.03 an aordable alternative. YTDgreater total net than abso 15,000rption SF SF $19.06 as an affordable alternative. • However, Edmonds will continue • attractingEdmonds small-to-midwill continue attracting size 2.7% companiessmall-to-mid as size there companies is just one as there 2.7%Total blockis just of one space block over of space 15,000 over 15,000 Totalvacancy vacancy squaresquare feet feet available. 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Analysis14 | 614 based - 616 5th on Ave prope S | Edmonds,rties over Washington 10,000 s.f., excluding owner/user and medical building. Edmonds/Lynnwood Q2-2019 retail market Q2 2019 10.96M SF Total net absorption Inventory • The Edmonds/Lynnwood retail 242,032 269,861 submarket totals 10,959,632 square 119,207 90,641 38,561 65,858 feet, or 6.1% of all Puget Sound retail space. 5,600 SF -10,233 Under -93,149 -163,215 • The submarket currently has a construction -239,213 vacancy rate of 3.5% percent, which 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q 2019 represents a decrease of 201 basis points year-over-year. $25.03 Total vacancy rate • Average rental rates for retail space in Overall average direct 6.4% 5.6% 5.7% Edmonds/Lynnwood currently stand asking rate 5.3% 5.1% 4.7% 4.6% 3.8% 4.1% at $25.03 per square foot, full service. 3.2% Given limited space options and low 3.5% vacancy, rents will likely continue to trend upward in 2019. change in asking rate YOY 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q 2019 • After eight consecutive quarters of negative net absorption, in Q2 2019 Direct average asking rent ( p.s.f.) 6 Edmonds/Lynnwood posted its $23.62 $24.62 $25.03 strongest quarter since Q3 2016 with $21.76 $22.60 Available Class A block $19.87 $19.62 $19.90 $20.27 $20.83 269,861 square feet of net absorption. greater than 20,000 SF • Of the nine signed Q2 leases, the largest was for 11,818 square feet at 4.6% 5615 188th St SW – also the largest Total lease by square feet year- to-date. vacancy 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q2 19 15 | 614 - 616 5th Ave S | Edmonds, Washington Market overview Northend transit options FREEWAYS 20-30 minute drive from Downtown Seattle to the Northend.