Capitol Hill DEVELOPMENT SITE

Development site located at 1661 E Olive Way, , WA 98102 Section 1 Executive Summary The Opportunity PROJECT SUMMARY – CAPITOL HILL DEVELOPMENT SITE

JLL has been retained as the exclusive agent to sell the Capitol Hill Addresses 1651-1661 E Olive Way & 123-127 Boylston Development Site (CHDS), consisting of three adjacent parcels located on Avenue E, Seattle, WA 98102 Capitol Hill, minutes from South Lake Union and Seattle’s CBD. Capitol Hill King County Tax Parcels 6848200685, 6848200690 & 6848200695 Development Site has an address blocks off , the most transit- connected street in Seattle, and earns a Walk Score of 97 and a Transit Current NC3P-65 - Height Limit 65’ Score of 94 a walker and rider paradise. Future The Seattle market as a whole, is primed with low vacancy, strong NC3P-75 (M) - Height Limit 75’ leasing velocity, explosive population growth, superior proximity to top Overlay: Capitol Hill Station Area tier employers and nation leading job and rent growth. 1,100 people Urban Village: Capitol Hill Urban Center are moving to the city of Seattle weekly, and almost two out of every 10 residents moving to Seattle between chose to live in the downtown core. Zoning Description NC3 Maximum FAR 6:1, excluding full/partial underground Nearly 50 percent of downtown residents are between the ages of 25 floors and 44, as younger employees want to work closer to home and enjoy everything a vibrant, urban location such as the Capitol Hill Development Typical Land Uses Site has to offer. Supermarkets, restaurants, offices, hotels, clothing shops, business support services, and residences that are compatible with The property is minutes from Seattle’s burgeoning technology and the area’s mixed-use character. business hubs and is surrounded by a vibrant mix of shopping, dining and Building Types entertainment options. CHDS represents an exceptional development Single purpose commercial structures opportunity located in the heart of , the fastest growing office buildings, multi-story mixed-use and major city in the country. residential structures. Nonresidential uses typically occupy the street front.

Capitol Hill Upzone & Mandatory Residential Housing Affordability (MHA) 7% affordable units and/or $20.75/SF paid into affordable housing fund. Will take effect when the area receives the pending upzone Commercial 5% of SF as affordable units and/or $8/SF paid into affordable housing fund. Uses on E Olive Way and first 4,000 SF on other street frontages exempt.

Total Project Lot Size 25,348 Square Feet / 0.58 Acres

CAPITOL HILL DEVELOPMENT SITE OFFERING MEMORANDUM LISTED EXCLUSIVELY BY JLL 2 Section 1 Executive Summary What is MHA?

Mandatory Housing Affordability (MHA) is a new policy to ensure that Developers will be able to comply with MHA by providing affordable housing growth brings affordability. MHA will require new developments to include (performance option) or paying into a fund that Seattle’s Office of Housing affordable homes or contribute to a City fund for affordable housing. uses to support the development of affordable housing throughout Seattle

The City’s Comprehensive Plan (Seattle2035) includes a goal to help (payment option). MHA requirements are proposed to vary based on the meet current and projected regional housing needs of all economic and geographic area of the city and the scale of the zoning change. Variation in demographic groups by increasing Seattle’s housing choices. To help achieve requirements will be indicated by an (M), (M1), or (M2) suffix at the end of the that goal, Seattle’s Housing Affordability and Livability Agenda (HALA) strives zone title. When the upzone is approved the new zoning for the Capitol Hill to create 50,000 homes by 2025, including 20,000 affordable homes. Critical Development site will be NC3-75 (M). to this overall vision, MHA will provide at least 6,300 of the 20,000 net new New residential development will have to contribute to the city’s affordable rent-restricted homes for households with incomes no higher than 60 housing stock by either building in between seven and 11 percent their units percent of the area median income. as affordable, or paying $20.75 to $32.75 per square foot to a city affordable

In the summer of 2017, the Seattle Office of Planning and Community housing fund. New commercial development has different requirements Development (OPCD) issued a Draft Environmental Impact Statement (DEIS) that range from five to nine percent of total floor area or $8 to $14.50 per that studies three alternatives for zoning changes needed to implement square foot in the in-lieu fee. Mandatory Housing Affordability (MHA) in Seattle’s urban villages such as The City Council has already implemented MHA in the U District, Uptown, Capitol Hill and other commercial and multifamily residential zones across Downtown, International District, and South Lake Union. The information the city. The City’s Final EIS and a preferred alternative will be developed regarding MHA is sourced from the City of Seattle’s MHA Overview. Please based on community comments received to date and input on the three contact an agent for full offering memorandum, site information, site uses alternatives in the DEIS. OPCD expects to complete the Final EIS of the and development study. preferred alternative this fall before transmitting a proposal to the Seattle City Council for consideration.

CAPITOL HILL DEVELOPMENT SITE OFFERING MEMORANDUM LISTED EXCLUSIVELY BY JLL 3 Section 1 Executive Summary Investment highlights

Exceptional development site High earning technology based rental pool CHDS represents a rare opportunity to invest in Seattle’s iconic development NerdWallet ranked Seattle as the second best place for STEM graduates, and cycle and to take advantage of nation leading demographics, population a top ten city for job seekers of all kinds. Seattle is ranked as the number and job growth. Seattle has an overabundance of renters seeking high-end one best paying city for software engineers, who make an average salary of living options that continues to bring employees to the downtown core at $132,000. Seattle is seeing an infl ux of highly educated professionals, many unprecedented rates. New apartment construction rents in the city’s core with advanced degrees, moving into the downtown core seeking an upscale, average $3.50 per foot for mid-rise and $4.00 per foot for high-rise buildings urban lifestyle. Not only does CHDS draw from the thriving technology work and the vacancy rate is 3.8 percent in Capitol Hill. force, but from the nearby First Hill medical community, which provides access to thousands of well-paid employees. Prime location blocks from station Located in the heart of the neighborhood and blocks from the new Capitol Hill light rail station, CHDS enjoys excellent access to Seattle’s extensive, and expanding transportation network. ’s light rail system currently provides service between the and Sea-Tac International Airport. Seattle’s streetcar system connects residents to First Hill medical centers, downtown to the international and stadium districts, and to future access along the waterfront and connections to the existing South Lake Union streetcar.

Superior proximity to top technology employers CHDS is located minutes away from a plethora of major technology employers. The technology sector has become one of the most signifi cant drivers of employment growth, major tech employers in Seattle include Amazon, Expedia, F5, Google and Facebook. Amazon is seeing massive growth in and around South Lake Union. Google leased 600,000 square feet in South Lake Union that will have room for 4,400 employees. Facebook will double its presence in 2018, and F5 just leased a downtown high rise building with room for 4,500 employees.

CAPITOL HILL DEVELOPMENT SITE OFFERING MEMORANDUM LISTED EXCLUSIVELY BY JLL 4 Section 1 Executive Summary

Investment highlights

Amazon’s impact Amazon has had a resounding impact on local employment and residential demographics. Amazon actively recruits out of state employees to fill their 6,000 current job openings, which has a positive effect on net in-migration. Amazon’s newly constructed Day One and Doppler towers on 6th avenue have room for over 7,000 employees, and construction is underway on Amazon’s neighboring third and fourth towers. By 2022, Amazon’s workforce would reach 90,000+ employees, and occupy more than 14 million square feet across 44+ buildings in Seattle’s core. Amazon’s growth seems unstoppable and it will continue to redefine Seattle.

Top metro destination Recent U.S. Census Bureau data shows Seattle is gaining about 1,100 residents per week. The city center itself has seen an 18 percent growth in population since 2010, according to the Seattle Downtown Association. During this same time, downtown has accounted for approximately 94 percent of all jobs gained in Seattle. As a result, the local metro is now listed as the top ranked destination in the country for career-oriented professionals and year-to-date office absorption is higher than the rest of the West Coast combined.

Highest concentration of millennials Due to the strong tech job market, relative affordability compared to other major cities, and high quality of living, the Seattle metro area continues to attract workers, particularly millennials, at a faster rate than every other major U.S. city. The census data for the city of Seattle, shows that 65 percent of apartment units constructed this decade have a resident under the age of 35. Portland is 52 percent and San Francisco is only 39 percent.

CAPITOL HILL DEVELOPMENT SITE OFFERING MEMORANDUM LISTED EXCLUSIVELY BY JLL 5 Amazon currently occupies more than 9.4M square feet, expected to top 14M by 2022

Queen Anne Puget Sound 2019 Ballard

Lake Union

Denny Way

CH

Olive Way DS

NORTH CHDS

Untitled layer Section 2 1661 E Olive Way Location Summary

Location

Located in the heart of Seattle’s Capitol Hill neighborhood, CHDS is connected to the City through several forms of transportation ranging from walking the Pike/Pine corridor, to riding metro, the streetcar or light rail. Downtown Seattle’s business district is located 0.9 miles from CHDS, can be accessed by bike in 10 minutes, by car in six minutes and by light rail or bus in under 10 minutes. South Lake Union, home to Amazon’s 30,000 plus employees, is a short four minute drive, 10 minute walk or seven minute bus ride.

Seattle introduced three new bike-share services this summer “LimeBike”, “Ofo” and “Spin” bikes offer dockless rides to residents throughout the Seattle core. The price of a single ride ($0.50-$1.00 per hour) it’s the lowest price of any bikeshare system in a major US city. Capitol Hill bikers can ride their own bikes easily into the city center, or take one of the 1,500 dockless bikes parked throughout the city. The summer success of these services has prompted one more company to fi le permits in Seattle. The per-company bike limit goes from 1,000 to 2,000 in September and expands again in October. Spin’s ultimate goal is to have 10,000 bikes across Seattle, and that’s just one company.

Seattle Central College (0.3 miles from CHDS) and (1 miles from CHDS) together have student enrollments of 23,400 students. Seattle Central is a short fi ve minute walk or even shorter two minute bike ride from CHDS. Seattle University, can be accessed by bike in nine minutes, by bus or in 12 minutes.

Seattle Central College

NORTH CAPITOL HILL DEVELOPMENT SITE OFFERING MEMORANDUM LISTED EXCLUSIVELY BY JLL 7 Section 2 Location Summary +7,400 Students Location Pike First Hill, which is home to two Swedish Hospital Streetcar Stop medical campuses, Virginia Mason Hospital, Group Health Hospital and numerous medial towers and Pine affi liated services, are all easily accessible via the . The streetcar has a stop at Denny and Broadway, just a few blocks from CHDS, and can deliver residents to the heart of First Hill’s medical community in minutes. Broadway 16,000 Students Seattle’s connectivity is further enhanced by the Sound Transit Light Rail system, which has a stop Streetcar Stop at Broadway and Olive Way, two blocks from CHDS. Light rail can deliver residents north to the University of Washington, which has a student body of 46,000, in four minutes. The rail also connects Capitol Hill to Downtown with stops from Westlake to the Stadiums Light Rail Station via the underground bus and rail . A ride all the way to SeaTac International Airport from the Capitol Hill station is about 40 minutes.

Olive Way NORTH CAPITOL HILL DEVELOPMENT SITE OFFERING MEMORANDUM LISTED EXCLUSIVELY BY JLL 8 Section 2 Location Summary Demographics

Demographics 1 Mile 3 Mile 5 Mile The area surrounding CHDS offers a traditionally young renter profi le, with Population 44.1% of its residents within a one mile radius are between 20 and 34 years 2017 Total Population: 75,799 135,091 230,468 old. This number is signifi cantly higher than the national average and 2022 Population Estimate: 83,644 145,610 247,717 demonstrates the shift in Seattle towards an amenity-rich city lifestyle. The Pop Growth 2017-2022: 10.35% 7.79% 7.48% population near the CHDS falls into one main categories - metro renters (source ESRI). Median Age: 34.8 36.7 36.5 Households The largest portion of residents within a one mile radius (79.7%) falls into the tapestry segment of “metro renters.” These are highly mobile 2017 Total Households: 46,162 67,001 101,148 and high educated people, living alone or with a roommate in urban Median Household Income: $51,230 $72,299 $79,447 cores - primarily in apartment buildings. TheyCHDS are interested in the arts, Average Household Income: $78,856 $116,614 $120,651 are hard workers and extremely social. It is estimated that 80.0% of Renter Occupied: 82% 58% 49% this niche are apartment renters. The infl uenceUntitled layerof the Metro Renter is evident in submarket statistics, which put the average1661 E Olive Way household income (within a three-mile radius) at $108,511. Within this same distance, 36.5% of households earn more than $100,000 per year and the average home value is $689,520. Median listing prices in the area range from $698,000 to $1,100,000.

Based upon the generally accepted three-to-one income-to-rent qualifi er, the high income area residents can reasonably afford premium rents and qualify for monthly payments well above current market rates. This rental runway signifi es upside for new ownership, yet remains attractive to the rental demographic of Capitol Hill when compared to the costs of 3 MILES 1 MILE 5 MILES homeownership.

CAPITOL HILL DEVELOPMENT SITE OFFERING MEMORANDUM LISTED EXCLUSIVELY BY JLL 9 Section 6 Transaction Guidelines

BIDDING PROCEDURE The offering of Capitol Hill Development Site is being conducted exclusively by JLL. All questions and inquiries should be addressed to the JLL representatives listed herein. The JLL team will be available to assist prospective investors with their review of the offering. This includes on-site inspections of the property and tours of the market area. Investors will receive advanced notifi cation of the bid deadline via email.

Offers should include, at a minimum, the following:

• The purchase price and closing date • The source of capital, both equity and debt, for the transaction • The amount of earnest money deposit • A detailed schedule of the due diligence and requisite approval process • A description of assumptions utilized for the offer

Disclaimer:

Copyright © Jones Lang LaSalle IP, Inc. 2017. This publication is the sole property of Jones Lang

LaSalle and must not be copied, reproduced or transmitted in any form or by any means, either in

whole or in part, without the prior written consent of Jones Lang LaSalle.

The information contained in this publication has been obtained from sources generally regarded

to be reliable. However, no representation is made, or warranty given, in respect of the accuracy

of this information. Jones Lang LaSalle does not accept any liability in negligence or otherwise for

any loss or damage suffered by any party resulting from reliance on this publication. Jones Lang

LaSalle Americas, Inc. License # 01223413.

CAPITOL HILL DEVELOPMENT SITE OFFERING MEMORANDUM LISTED EXCLUSIVELY BY JLL 10 INVESTMENT CONTACTS

DAVID YOUNG Managing Director Phone: +1 206 607 1719 [email protected]

COREY MARX Managing Director Phone: +1 206 607 1726 [email protected]

MATT KEMPER Vice President Phone: +1 206 607 1752 [email protected]

DON FLANIGAN Vice President Phone: +1 206 971 7020 don.fl [email protected]

FINANCING CONTACTS

RAY ALLEN Managing Director Phone: +1 206 607 1788 [email protected]

SETH HEIKKILA Senior Vice President Phone: +1 206 607 1732 [email protected]