CO N T I N E N TA L M I L L S 1 0 0 % N N N L E A S E D C O R P O R AT E H E A D Q U A R T E R S
84,250 Square Feet, Seattle Metro Area, T u k w i l a , W a s h i n g t o n
Affiliated Business Disclosure
Interested parties are expected to review all such summaries and other documents of whatever nature independently and not rely on the contents of this Memorandum in any manner.
CBRE, Inc. operates within a global family of companies with many subsidiaries and/or related entities (each an “Affiliate”) engaging in a broad range of commercial real estate
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businesses including, but not limited to, brokerage services, property and facilities
representatives make any representation or warranty, expressed or implied, as to the accuracy
management, valuation, investment fund management and development. At times
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obligation shall arise by reason of your receipt of this Memorandum or use of its contents;
transaction. For example, this Memorandum may be received by our Affiliates, including
and you are to rely solely on your investigations and inspections of the Property in evaluating
CBRE Investors, Inc. or Trammell Crow Company. Those, or other, Affiliates may express
a possible purchase of the real property.
an interest in the property described in this Memorandum (the “Property”) may submit an offer to purchase the Property and may be the successful bidder for the Property. You
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hereby acknowledge that possibility and agree that neither CBRE, Inc. nor any involved
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Owner shall have no legal commitment or obligation to any entity reviewing this Memorandum
interest of the client(s) it represents in the transaction described in this Memorandum
or making an offer to purchase the Property unless and until written agreement(s) for the
and will not act in concert with or otherwise conduct its business in a way that benefits
purchase of the Property have been fully executed, delivered and approved by the Owner and
any Affiliate to the detriment of any other offer or or prospective offer or, but rather will
any conditions to the Owner’s obligations therein have been satisfied or waived.
conduct its business in a manner consistent with the law and any fiduciary duties owed to the client(s) it represents in the transaction described in this Memorandum.
By receipt of this Memorandum, you agree that this Memorandum and its contents are of a confidential nature, that you will hold and treat it in the strictest confidence and that you will
Confidentiality Agreement
not disclose this Memorandum or any of its contents to any other entity without the prior written
This is a confidential Memorandum intended solely for your limited use and benefit in
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determining whether you desire to express further interest in the acquisition of the Property. This Memorandum contains selected information pertaining to the Property and does not
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If after reviewing this Memorandum, you have no further interest in purchasing the Property, kindly return this Memorandum to CBRE, Inc.
purport to be a representation of the state of affairs of the Property or the owner of the Property (the “Owner”), to be all-inclusive or to contain all or part of the information which prospective
Disclaimer
investors may require to evaluate a purchase of real property. All financial projections and information are provided for general reference purposes only and are based on assumptions
© 2016 CBRE, Inc. The information contained in this document has been obtained from sources
relating to the general economy, market conditions, competition and other factors beyond
believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified
the control of the Owner and CBRE, Inc. Therefore, all projections, assumptions and other
it and makes no guarantee, warranty or representation about it. It is your responsibility to
information provided and made herein are subject to material variation. All references
independently confirm its accuracy and completeness. Any projections, opinions, assumptions
to acreages, square footages, and other measurements are approximations. Additional
or estimates used are for example only and do not represent the current or future performance
information and an opportunity to inspect the Property will be made available to interested
of the property. The value of this transaction to you depends on tax and other factors which
and qualified prospective purchasers. In this Memorandum, certain documents, including
should be evaluated by your tax, financial and legal advisors. You and your advisors should
leases and other materials, are described in summary form. These summaries do not purport
conduct a careful, independent investigation of the property to determine to your satisfaction
to be complete nor necessarily accurate descriptions of the full agreements referenced.
the suitability of the property for your needs.
TABLE OF CONTENTS
CO N T I N E N TA L M I L L S
EXECUTIVE SUMMARY
6
TENANT OVERVIEW
14
PROPERTY DESCRIPTION
18
AREA & MARKET OVERVIEW
28
FINANCIAL OVERVIEW
38
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY CBRE, Inc., as exclusive advisor, presents the opportunity to acquire Continental Mills Corporate
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
Headquarters, a two building, Class A, 84,250 square foot office campus located in the Seattle Metro submarket of Tukwila, Washington. The property is 100% leased through April 2026 on a NNN lease basis to Continental Mills, a leader in the food products industry since its founding in 1932. Continental Mills has maintained its headquarters location in Seattle South Business Park since 1978, expanding its corporate offices in 1986 and again in 2011. The most recent expansion included the development of the new 57,568 SF corporate headquarters building and the complete renovation of the 26,682 product innovation center, reflecting the tenant’s long-term commitment to this location. Building B Exterior
PROPERTY SUMMARY
Address
Building A
Building B
Innovation Center
Headquarters
18000 Andover Park West
18100 Andover Park West
Tukwila, Washington 98188 Building Rentable Area
26,682 SF
Total Rentable Area
6
84,250 SF
Occupancy
100%
100%
Land Area
1.62 acres
5.03 acres
768990-0010
352304-9055
Two
Two
1986 / 2011
2011
86 stalls
208 stalls
Parcel Number Stories Year Built /Renovated Parking
Building B Reception Area
57,568 SF
SEATTLE
PUGET SOUND
BELLEVUE
PORT OF SEATTLE
LAKE WASHINGTON
5
Westfield Southcenter Mall
Boeing Commercial Airplanes Headquarters
405
5
EXECUTIVE SUMMARY
SEATTLE-TACOMA INTERNATIONAL AIRPORT
Sound Transit Link Light Rail Tukwila Station
7
CO N T I N E N TA L M I L L S
TO
OM TAC
A
INVESTMENT HIGHLIGHTS STABLE, NNN INCOME PROFILE
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
The Property is 100% leased on a net basis through April 2026, reflecting a remaining lease term of 9.3 years and lease structure that provide for tenant reimbursement of all operating expenses. The stable and secure cash flow enables investors to secure attractive financing options and enhanced leveraged cash returns.
ESTABLISHED CREDIT WORTHY TENANT Continental Mills is a third generation, privately held company founded in 1932. The company is a leader in the food products industry and maintains a growing portfolio of exceptional breakfast, baking and snack brands products including the
Innovation Center Exterior
Krusteaz and Albers brands. The company operates four production plants and two major distribution facilities in four states, and its products are sold through retail, foodservice, and club store channels throughout the United States.
MISSION CRITICAL ASSET The tenant has maintained its headquarters and main production facilities in the submarket for over 50 years, and the Property location has been home to the company’s headquarters since 1978. The company’s owned and operated regional
8
manufacturing plant is located less than 2-miles away. Building A (26,682 SF) serves as the company’s research and innovation center and Building B (57,568 SF) is the corporate headquarters. The tenant has recently invested over $7.0 million ($80/SF) into the buildings, reflecting the Property‘s importance to Continental Mills.
Headquarters Entry
HIGH QUALITY CONSTRUCTION The property comprises two Class A, high quality, two-story, concrete and steel buildings situated on separate tax parcels with abundant surface parking capacity. Building B was constructed in 2011 on a build-to-suit basis, accommodating an expansion of the company’s corporate headquarters footprint and Building A was fully renovated in 2011, accommodating upgrades to the tenant’s research and product development facilities.
MASTER PLANNED BUSINESS PARK ENVIRONMENT Continental Mills Corporate Headquarters is located in the Seattle South Business Park, a 1.3 million square foot, 76-acre master planned park. Companies located in Tukwila have the unique opportunity to use a “Seattle” mailing address and “206” area code
Building Exteriors
DESIRABLE, AMENITY-RICH LOCATION The Property is located three miles from SeaTac International Airport, two miles from the Sounder Region Commuter rail station, and benefits from multiple access points to Interstates 5 and 405, providing excellent access and transit options. Downtown Seattle and Bellevue are each located 14 miles to the north, and the Westfield
EXECUTIVE SUMMARY
while avoiding the Seattle Business & Opportunity (B&O) tax.
Southcenter regional mall is located one mile from the Property, providing access to over 90 restaurants and 40 hotels in the area.
SUPERIOR REGIONAL ECONOMIC PERFORMANCE The Puget Sound Region is one of most dynamic and best performing markets in the United States, possessing a highly diversified economy with an unemployment rate of 4.3% and median household income that is 28.8% above the national average. Since 2010 the regional economy has created over 276,000 new jobs resulting in the absorption of over 13 million square feet of office space.
Innovation Center Atrium
9
REGIONAL MAP 520
520
Redmond
5
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
Port of Seattle
Seattle
405
90
90
Mercer Island
West Seattle
Newcastle
5
900 900
Renton
Tukwila
509 10
Bellevue
169
518
Seattle-Tacoma International Airport
CO N T I N EN TA L M I L L S 167 181
Des Moines 516
5
515
Kent
LOCAL MAP 518
5
518
405
99
181
Andover Park West
Southcenter Seattle-Tacoma International Airport
t h St S 180
en
te
rP
kw y
5
EXECUTIVE SUMMARY
CO N T I N EN TA L M I L L S Sou t hc
509
181 r
Green Rive
Angel Lake
11
99 5
O’Brien
S
TENANT OVERVIEW
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
TENANT OVERVIEW
Based in Seattle, Washington, Continental Mills is a privately held company that has been producing a wide variety of products since 1932. Continental Mills Corporate Headquarters comprises two buildings; the Business Center (Building B) and the Innovation Center (Building A). The Property serves as the company’s headquarters as well as their research and development laboratory. Continental Mills has occupied Building A since 1996 and Building B since 2011. The modern and spacious Business Center is home to corporate employees that support various aspects of the business. The building features unique art installations that tell the story of their People, Products and Plants with imagery and large wall graphics. Adjacent to the Business Center is the Innovation Center, which also reflects a modern feel that provides inspiring space for employees to create new and exciting products for customers and consumers. The company’s products are sold on an international scale with various wellknown brand names, such as Krusteaz, Alpine, and Ghirardelli. Krusteaz is one of Continental Mills most well-known brands and is best known for the various baking mixes they sell. Alpine produces apple and spiced ciders for
14
Continental Mills. The brand is popular year round, as a caffeine-free and rich in Vitamin C alternative to coffee and tea. Continental Mills has a nationwide presence, featuring product distribution internationally and in all 50 states, supported by four manufacturing facilities, two distribution centers, and Corporate Business and Innovation Centers. They are continually investing in their people and facilities through equipment modernization and implementation of technology efficiencies, all with an eye toward verifiably better quality.
Company Information Tenant
Continental Mills
Website
www.continentalmills.com
Headquarters
Tukwila, WA
Lease Information Address Number Building Leased Area
Building A
Building B
18000
18100
27,002 SF
57,568 SF
Total Leased Area
84,250 SF
% of Project NRA
31.7%
68.3%
Total In Place Rent/Year
$1,565,007
Total In Place Rent/Year/SF
$18.58/SF May 2011
May 2011
Lease Expiration
April 2026
April 2026
BRANDS
LICENSED BRANDS
TENANT OVERVIEW
Lease Start Date
15
PROPERTY DESCRIPTION
CONTINENTAL MILLS Property Details
ADDRESS
BUILDING A
BUILDING B
18000 Andover Park West
18100 Andover Park West Tukwila, Washington 98188
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
TENANT OCCUPANCY BUILDING RENTABLE AREA
Continental Mills
Continental Mills
100%
100%
26,682 SF
57,568 SF
TOTAL RENTABLE AREA STORIES LAND AREA
84,250 SF Two
Two
1.62 Acres
5.03 Acres
TOTAL LAND AREA
6.65 Acres
YEAR BUILT /RENOVATED
1986 / 2011
2011
FLOOR - FLOOR HEIGHT
13’
15’
352304-9055
768990-0010
HI with TS Overlay
HI with TS Overlay
PARCEL NUMBER ZONING PARKING
UTILITIES
18 FOUNDATION SYSTEM
A total of 86 surface parking stalls are provided, including two designated as disabled-accessible. Water: Sanitary/Sewer: Electric: Gas: Telephone: The building is supported on conventional concrete spread footings. Rectangular footings support the precast concrete fins and the precast concrete stem walls at the perimeter of the buildings. Square pad footings, 3’-0” and 4’-0” square by 12" deep, support the interior steel columns.
A total of 208 surface parking stalls are provided, including seven designated as disabled-accessible. Highline Water City of Tukwila Puget Sound Energy (PSE) Puget Sound Energy (PSE) Century Link The building is supported on conventional concrete spread footings. Continuous strip footings, 9-1/4” deep and 24” wide, support the perimeter walls. Rectangular footings support the precast concrete fins at the perimeter of the building. Square pad footings, 7’-0” square by 21” deep, support the interior steel columns. Rectangular footings ranging in size from 10’-6” to 12’-0” in width, 44’ to 53’ in length, and 38” to 48” in depth support the interior concrete walls.
Property Details
VERTICAL LOAD-RESISTING SYSTEM
BUILDING B
A 4” thick concrete topping slab occurs beneath the rooftop mechanical unit near the center of the roof structure. Elevated floor framing utilizes a 4” concrete slab reinforced with welded wire fabric supported by metal form deck, which is supported by open-web steel joist girders and precast concrete spandrel beams. Steel tube columns support the roof and floor framing at the interior of the structure while precast concrete fins support the framing at the perimeter.
The roof framing consists of 1-1/2” metal deck supported by open-web steel joists and steel wide flange beams, which are in turn supported by open-web steel joist girders, steel wide flange beams, and precast concrete spandrel beams. Elevated floor framing utilizes a 4” concrete slab which is reinforced with welded wire fabric supported by metal form deck, which is supported by open-web steel joists and steel wide flange beams. Open-web steel joist girders, steel wide flange beams, and precast concrete spandrel beams support the elevated floor framing. The perimeter concrete fins, interior steel tube columns, and concrete walls support the roof and elevated floor framing.
The ground level floor consists of a 4” thick concrete slab-on-grade reinforced with welded wire fabric at the slab centerline. ROOFING
The low-slope roof is finished with a 60mil thermo-plastic polyolefin (TPO) roof membrane manufactured by GAF. The roof slopes to a series of interior roof drains and overflows set in recessed sumps. The roofing is an overlay that was installed in 2011 over an unknown roof system over rigid insulation and the metal roof deck. The roofs of the covered entries also have a TPO membrane on a low-slope roof with interior roof drains.
The low-slope roof is finished with a 60mil thermo-plastic polyolefin (TPO) roof membrane manufactured by Firestone. The roof slopes to a series of interior roof drains and overflows set in recessed sumps. The roofing is original to the building's construction. The roofs of the eastern porte-cochere and western covered entry also have a TPO membrane on a low-slope roof with interior roof drains. The roof of the stair overrun drains via a through-wall scupper with downspout that discharges to the main roof level. The roof of the covered walkway consist of prefinished raised-rib metal panels sloped to perimeter gutters with downspouts.
MANUFACTURER'S WARRANTIES:
The roof carries a 20-year Everguard Diamond Pledge NDL Roof Guarantee by GAF that expires September 7, 2031. The warranty is transferable subject to owner's payment of a transfer fee and inspection by GAF.
The TPO roof carries a 20 year Red Shield Warranty by Firestone that expires January 31, 2031. The warranty is transferable subject to owner's payment of a transfer fee.
EXTERIOR WALLS
The exterior of the building primarily consist of precast concrete wall panels set between exposed concrete perimeter columns. The columns generally have a smooth finish. The wall panels typically have a board-form texture and smooth perimeter trimmed edge. Although no finish is visible on the concrete, property management indicates the exposed concrete has been sealed. Flexible sealant joints are utilized between the concrete wall panels and columns and at the perimeter of most openings.
PROPERT Y DESCRIPTION
BUILDING A
19
Property Details
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
BUILDING A
20
BUILDING B
WINDOWS
Windows generally consist of aluminum storefront framed ribbon windows with dark tinted insulated glazing units. The frames have a dark anodized finish and integral weeps at the sills. Storefront glazing is utilized at the side of the various storefront entry doors around the building perimeter. Glazing is typically set into the frames with friction fit EPDM gaskets.
EXTERIOR DOORS/FRAMES
Doors generally consist of insulated glazed storefront doors integral with the aforementioned storefront glazing. Doors are fitted with exterior pull-hardware, interior push or panic hardware, automatic closers and aluminum thresholds. The door for the roof level stair-overrun consist of a painted hollow metal door in metal frame.
INTERIOR WALLS
The Interior framed walls define the office areas and are metal stud with gypsum wall-board. The perimeter office walls are provided with an upgraded "Dirtt" wall system with opaque screening band for privacy.
INTERIOR DOORS/FRAMES
Interior office doors are typically solid-core wood doors set in wood or "Dirtt" window system frames with lever or pull hardware.
CEILINGS
Office area ceilings are typically 2' x 4' metal T-bar frame with conventional acoustic ceiling panels. Fluorescents lighting fixtures are integrated in the ceiling of the office spaces.
FLOORS
Floors of the office areas are typically carpeted except in the few instances of resilient tile in preparation spaces.
RESTROOMS
Tenant restrooms are typically multi-user, with wall-mounted porcelain toilets, and under-mount porcelain sinks with solid surface countertops.
Tenant restrooms are typically multi-user, with wall-mounted porcelain toilets, and under-mount porcelain sinks with solid surface countertops. Laminated toilet partitions are ceilingand wall-mounted.
KITCHENS
Kitchenettes are typically provided within the office spaces and consist of a stainless steel surface-mounted sink, laminated cabinets, and refrigerator. A large kitchen and preparation area is provided on the second floor and dominates the floor plate. Large ovens and several preparation tables with tenant equipment is provided in the southern half and perimeter spaces. A northern perimeter blind-taste testing room and associated preparation room is also provided.
Kitchenettes are typically provided within the office spaces and consist of a stainless steel surface-mounted sink, laminated cabinets, and refrigerator.
Property Details BUILDING A
BUILDING B
Interior stairs consist of concrete treads poured into metal pans and landings covered with a commercial carpet finish, painted gypsum board walls and ceiling, and tubular metal handrails.
Interior egress stairs and central open stair consist of concrete treads poured into metal pans and landings. The egress stairs are covered with a commercial carpet finish, painted gypsum board walls and ceiling, and tubular metal handrails.
HEATING, VENTILATION, AND AIR CONDITIONING
The office areas are cooled by one Trane model SFHLF 60-ton capacity packaged RTUs. The RTU has a gas-fired heating section used for morning warmup. The RTU serves fan-powered variable air volume (VAV) boxes. Zone heating is provided by electric heating coils in the VAV boxes. The main lobby is heated and cooled by a separate Trane Model TSC 7.5 ton capacity RTU with gas heating. RTUs are mounted on equipment curbs, have PVC condensate drains that discharge onto the roof, and use R-22 refrigerant.
The office areas are cooled by two Trane model SFHLF 60-ton capacity packaged RTUs. Each RTU has a gasfired heating section used for morning warmup. The RTUs serve fan-powered variable air volume (VAV) boxes. Zone heating is provided by electric heating coils in the VAV boxes. The main lobby is heated and cooled by a separate Trane Model TSC 7.5 ton capacity RTU with gas heating. The server room is cooled by two Trane model TCD 20-ton capacity RTUs. RTUs are mounted on equipment curbs, have PVC condensate drains that discharge onto the roof, and use R-410A refrigerant.
Temperature controls are provided by a Trane Traces SC direct digital control (DDC) system. Outside air is supplied to the air conditioned spaces via the RTUs and their air distribution systems. Restrooms are ventilated by a roof-mounted exhaust fan.
PLUMBING
Temperature controls are provided by a Trane Traces SC direct digital control (DDC) system. Outside air is supplied to the air conditioned spaces via the RTUs and their air distribution systems. Restrooms are ventilated by a roof-mounted exhaust fan.
Domestic water is supplied through a meter and backflow Domestic water is supplied through a meter and preventer; both are located in pits in the landscaped area backflow preventer; both are located in pits in the on the south side of the building. landscaped area on the south side of the building. Domestic hot water for the first floor restrooms is produced by an 80-gallon capacity electric water heater, and hot water for the second floor restrooms is produced by a 50-gallon capacity residential grade water heater. Each water heater has an expansion tank and the relief valve is piped in copper to mop sink. The water heaters are seismically braced.
Domestic hot water is produced by a 50-gallon capacity electric water heater located in the janitor’s closet. The water heater has an expansion tank, circulation pump, and the relief valve is piped in copper to mop sink. The water heater is seismically braced.
PROPERT Y DESCRIPTION
INTERIOR STAIRS
21
Property Details
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
ELECTRICAL
22
BUILDING A
BUILDING B
Power is supplied to the building from the local utility through a padmounted transformer to a 800-amp, 277/480-volt, 3-phase, 4-wire main switchboard (MSB) located in the main electrical room.
Power is supplied to the building from the local utility through a padmounted transformer to a 1,600-amp, 277/480-volt, 3-phase, 4-wire main switchboard (MSB) located in the main electrical room.
Power is distributed from the MSB via conduit and wire to an electrical room on each floor that contain 277/480-volt breaker panels, stepdown transformers, and 120/208-volt breaker panels.
Power is distributed from the MSB via conduit and wire to an electrical room on each floor that contain 277/480-volt breaker panels, stepdown transformers, and 120/208-volt breaker panels.
EMERGENCY POWER:
No emergency generator is provided. Emergency power for exit signs and emergency lighting is provided by battery-backed fixtures.
LIGHTING SYSTEM:
Generally, light fixtures are 2' x 2' and 2' x 4' recessed fixtures that use T-8 fluorescent tubes. Lighting is controlled by a Watt Stopper control panel.
FIRE ALARM SYSTEM:
The building is protected by a fire alarm system with a Simplex model 4100ES addressable fire alarm control panel (FACP) that monitors smoke detectors, pull stations, and fire sprinkler flow and tamper switches. The FACP activates interior horn/strobe devices and an exterior bell. The FACP is monitored off-site by Simplex Grinnell.
EMERGENCY LIGHTING/EGRESS SIGNAGE:
Emergency lights and exit signs are typically battery-backed combination fixtures.
FIRE SPRINKLER SYSTEM:
The fire sprinkler system consists of a post indicator valve, fire department connection, and two 8" wet-pipe risers. Design criteria tags indicated a design flow of 0.15 gallons per minute per square foot over 1,500 square feet.
The fire sprinkler system consists of a post indicator valve, fire department connection, a 3" and a 4" wet-pipe risers. Design criteria tags indicated a design flow of 0.15 gallons per minute per square foot over 1,500 square feet.
ELEVATORS
"The vertical transportation system consists of one hydraulic elevator that serves Floors one and two. The elevator was manufactured and installed by Otis Elevator presumably during original building construction in 1986. The elevator is rated for 2,500 and has fast and efficient center opening doors. The elevator has an LVR 4 simplex controller.
The vertical transportation system consists of one hydraulic elevator that serves Floors 1 and 2. The elevator was manufactured and installed by ThyssenKrupp Elevator, is rated for 2,500, has a side opening door, and has a TAC 20 electronic controller.
The interior of the elevator has laminate wall panels, translucent ceiling panels, carpet flooring, and a stainless steel car operating panel. The elevator has been updated with infrared safety edges.
The building is protected by a fire alarm system with a Simplex model 4100U addressable fire alarm control panel (FACP) that monitors smoke detectors, pull stations, and fire sprinkler flow and tamper switches. The FACP activates interior horn/strobe devices and an exterior bell. The FACP is monitored off-site by Simplex Grinnell.
The interior of the elevator has decorative wood veneer wall panels, translucent ceiling panels, carpet flooring, and a stainless steel car operating panel. The elevator is equipped with infrared safety edges. ADA features include Braille signage, floor passing chimes, and hands free communications.
N
SITE PLAN N
ANDOVER PARK W
’
280’
S 180TH STREET
100’
BUILDING B HEADQUARTERS 57,568 SF 2 STORY OFFICE
INN BU OV ILD AT IN 2 S 27,0 ION G A TO 02 CEN RY SF TE R OF FIC 14 3’ E
PROPERT Y DESCRIPTION
89
23
FLOOR PLAN BUILDING A
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
Main Building Entry
24
FIRST FLOOR
SECOND FLOOR
N
FLOOR PLAN BUILDING B
Main Building Entry
N
FIRST FLOOR
PROPERT Y DESCRIPTION
SECOND FLOOR
25
AREA & MARKET OVERVIEW
PUGET SOUND REGION OVERVIEW The greater Seattle area possesses a critical mass of well-capitalized and innovative companies that are global leaders in industries such as aerospace, biotechnology, global health, research, retail, software, technology, and wireless services. Leading companies and organizations that draw upon the area’s
ADOBE SYSTEMS
MICROSOFT
ALASKA AIRLINES
NINTENDO USA
AMAZON.COM
NORDSTROM
T-Mobile USA, and PACCAR.
APPTIO
PACCAR
AT&T
PROVIDENCE HEALTH & SERVICES
The region benefits from the unique confluence of capital, a highly educated
BILL & MELINDA GATES FOUNDATION
PUGET SOUND ENERGY
workforce, and an environment of collaboration. At the center of this
THE BOEING COMPANY
REDFIN
environment is the University of Washington, a globally respected research-
CONCUR TECHNOLOGIES
REI
based institution with an annual research budget exceeding $ 1.4 billion, and
COSTCO WHOLESALE
SAFECO
The Bill and Melinda Gates Foundation with an endowment now exceeding
EDDIE BAUER
SEATTLE’S CHILDREN
$40 billion. This significant capital base paired with a highly knowledgeable
EXPEDIA
STARBUCKS
workforce is providing the opportunity for continued research and business
F5 NETWORKS
SYMETRA
activity at critical institutions such as the Fred Hutchinson Cancer Research
T-MOBILE USA
Center, Institute for Systems Biology, PATH, Allen Institute for Brain Research,
FRED HUTCH
VALVE
VERIZON
GROUP HEALTH
ZILLOW
highly educated and productive workforce include Amazon.com, Microsoft, CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
The Boeing Company, Expedia, F5 Networks, Nordstrom, Costco Wholesale, Concur Technologies, REI, Starbucks, Nintendo USA, Esterline Technologies,
Center for Infectious Disease Research, and Juno Therapeutics. This positive environment has attracted and motivated other innovative and high-growth companies to establish a presence in the region, including
28
MAJOR EMPLOYERS
industry leaders Apple, Google, Facebook, Linked In, Intel, Salesforce.com, Adobe Systems, and Alibaba, to name a few.
JUNO THERAPEUTICS
12 including Computer Services, Data Processing/Hosting, Scientific Research, Software Development, and Wireless Communications.
7 MILLION The regional economy has demonstrated record levels of employment
Washington's population topped 7 million in 2015
and population growth since 2010, creating over 276,000 new jobs and
GROWING POPULOUS AND NET MIGRATION
absorbing over 13.2 million square feet of office space. The Brookings Institute ranked Seattle #2 nationally in its 2015 survey of regional economies that boast high concentrations of “Advanced Industries”, noting there is “depth and balance across multiple advanced industry categories”. Out of 12 rated categories, Seattle possesses significant concentrations in 9 of the 12 including Computer Services, Data Processing/Hosting, Scientific Research, Software Development, and Wireless Communications.
LAST 5 YEARS
445K (+6.6%) Increase in Population
#9
Seattle ranks No. 9 in the US for net migration
MAJOR EMPLOYERS
#1
Ranked #1 by Forbes as the Best City for Jobs in the Nation in 2015
NEXT 5 YEARS
437K (+6.1%) Projected Increase in Population
#1
Washington state ranks No. 1 for combined job and wage growth
Amazon.com, Microsoft, Boeing, Google, Costco, T-Mobile USA, Facebook, Expedia, Starbucks
AREA & MARKET OVERVIEW
29
The Puget Sound regional office market benefits from the highly diversified economy and the presence of high-growth industries software development, technology, digital gaming, life sciences, aerospace manufacturing, retailing, and global health research. •
110 million square foot office market, 3rd largest market on the West Coast and 10th largest in the United States
•
13.2 million square feet of net absorption since 2010, the 4th highest of all markets in the United States
•
Net positive absorption in 24 of last 25 quarters reflects stable and continued growth in Downtown and Eastside markets
•
West Coast markets Seattle, San Francisco, San Jose, and Portland all registered year-over-year job growth of 3.5% or greater
30 CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
TUKWILA/SOUTHEND OFFICE MARKET The Southend office market has broad appeal to tenants with the average
and SR-167, just minutes from Seattle, Bellevue, Tacoma and Seattle-Tacoma
cost of office space 40% and 50% below Bellevue and Seattle full service rents
International Airport, the Southend office submarket has a strong and diversified
respectively. Additionally, housing costs in the Southend are substantially
employment base. Employers with headquarters in the Southend include: REI,
lower than Bellevue and much of Seattle, thereby allowing employers
one of the largest outdoor apparel retailers in the world; Alaska Airlines, the
access to a large, nearby and relatively inexpensive labor pool. For workers
highest rated major airline carrier in the country; Boeing Commercial Airplanes,
living in Seattle and Bellevue the Southend is effectively a reverse commute
the largest business division within The Boeing Company; Providence Health,
allowing businesses to enjoy lower space costs without the challenges and
one of the largest health care providers in the West with 64,000 employees;
lost efficiencies due to traffic congestion. The Southend market also provides
and Hasbro/Wizards of the Coast, a multinational gaming company. Large
immediate access to the Seattle-Tacoma International Airport, both Ports of
organizations that have chosen to locate significant divisions or offices in the
Seattle and Tacoma and is adjacent to the Kent Valley industrial market. The
Southend include BECU, Group Health Cooperative, PACCAR, the Federal
Kent Valley market has over 100 million square feet and provides most of the
Aviation Administration and the Federal Reserve Bank. The Southend market
greater Puget Sound region’s distribution and manufacturing space.
consists of approximately 10 million square feet of space distributed over six primary submarkets: Renton, Sea-Tac, Tukwila, Kent, Auburn, and Federal Way. Renton and Tukwila are the most centrally located of the Southend submarkets and comprise 5.3 million square feet of office space, and reflect a direct vacancy rate of 9.5% as of Q2/2016.
SOUTHEND MAJOR EMPLOYERS
AREA & MARKET OVERVIEW
Located at the intersection of I-5 and I-405, and South between and along I-5
ALASKA AIRLINES (HQ) BECU (HQ) BOEING COMMERCIAL AIRPLANES (HQ) CONVERGENT RESOURCES FEDERAL AVIATION ADMINISTRATION FEDERAL RESERVE BANK GROUP HEALTH (KAISER) INTEGRA TELECOM PACCAR PROVIDENCE HEALTH & SERVICES (HQ) REI (HQ) WIZARDS OF THE COAST (HASBRO)
31
LL TUKWILA, ALL TUKWILA, WASHINGTON WASHINGTON WESTFIELD SOUTHCENTER MALL
SOUND TRANSIT LINK LIGHT RAIL TUKWILA STATION
SOUTHCENTER M
SOUTHCENTER MALL TUKW CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
SOUTHCENTER MALL TUKWILA, WASHING 405 SOUTHCENTER MALL TUKWILA, WASHINGTON SOUTHCENTER MALL TUKWILA, TUKWILA,WASHINGTON WASHINGTON SOUTHCENTER MALL SOUTHCENTER MALL TUKWILA, WASHINGTON
5
SOU
THC
ENT
ER
PAR KW AY
© 2014 CBRE, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. ejs 06-23-14
32
SEATTLE - TACOMA INTERNATIONAL AIRPORT
2014 CBRE, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of property for your needs. ejs 06-23-14 © 2014 CBRE, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. ejs 06-23-14
CBRE and the CBRE logo are service marks of CBRE, Inc. and/or its affiliated or related companies in the United States and other countries. All other marks displayed on this document are the property of their respective owners.
Š 2014 CBRE, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs. ejs 06-23-14
mation has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used mation has been obtained from sources believed reliable. We have not your verified it andshould make conduct no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates usedof ot represent the current or future performance of the property. You and advisors a careful, independent investigation of the property to determine to your satisfaction the suitability ot06-23-14 represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of smation 06-23-14 has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used ot represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of s 06-23-14
CO N T I N E N TA L M I L L S AN
DOopinions, ined from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, VE assumptions or estimates used nt or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine toR your satisfaction PA the suitability of
PARKWAY
S
SOU
TH CEN entation about it. Any projections, opinions, assumptions or estimates usedT E R nvestigation of the property to determine to your satisfaction the suitability of
18
0T
H
ST
RE
ET
RK W
E, Inc. This information has been obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used e only and do not represent the current or future performance of the property. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of or your needs. ejs 06-23-14
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
COMPETITIVE SET
34
ASKING RATES NNN
OWNERSHIP
100.0%
N/A
Subject Property
6,410
90.1%
$18.00
JCR Development
40,000
0
100.0%
$16.50
JCR Development
1991/2000
60,782
0
100.0%
$16.50
JCR Development
1999
40,922
0
100.0%
$16.50
JCR Development
1600 Lind and 1601 East Valley, Renton
1986-87/2004
273,903
4,996
98.2%
$16.50
Redwood Kairos
Time Square
500-800 SW 39th Street, Renton
1984-86/2003
324,287
27,862
91.4%
$17.00
LBA Realty
5
Triton Tower One
555 South Renton Village Place, Renton
1986/1991
132,511
15,137
88.6%
$18.00
Hines / Oaktree
6
Rivertech Corporate Center 500 Naches Ave SW, Renton
1990/2012
73,132
0
100.0%
$18.50
Griffin Capital
1,094,655
54,405
95.0%
NAME
ADDRESS
YR BUILT/ RENOVATED
RSF
CONTINENTAL MILLS
18000-18100 Andover Park West, Tukwila
1986/2011
84,250
0
1
Southcenter Place
16400 Southcenter Parkway, Tukwila
1979/2007
64,868
2
Fort Dent I
6720 Fort Dent Way, Tuwkila
1987/2014
Fort Dent II
6840 Fort Dent Way, Tukwila
Fort Dent III
7100 Fort Dent Way, Tukwila
3
Landmark West and East
4
TOTAL
VACANT OCCUPANCY
COMPETITIVE SET MAP 518
5
6
5
405
2
518
3
405
99
1
167 181
4
Seattle-Tacoma International Airport
Andover Park West
Southcenter 5
t h St
S 180th St
en
te
rP
kw y
S 180
AREA & MARKET OVERVIEW
CO N T I N EN TA L M I L L S
Sou t hc
509
181 r
Green Rive
Angel Lake
167
35
99 5
O’Brien
FINANCIAL ANALYSIS
FINANCIAL SUMMARY
CASH FLOW ASSUMPTIONS Cash Flow Start Date:
January 1, 2017
where is” condition of the Property.
2016 Market Rents Building A Building B
$16.50 NNN per square foot per year $17.50 NNN per square foot per year
Summarized below are the financial results for Continental Mills Corporate
Rent Abatement (Months)
5 Months New / 3 Months Renewal
Market Rent Growth Rate:
3.00% 3.00% 3.00% 3.00%
Lease Term:
5 Years
Rent Increases During Term:
$0.50 per square foot per year
Reimbursable Expenses:
NNN
Renewal Probability:
80%
Downtime: Building A Building B
9 Months 12 Months
Continental Mills Corporate Headquarters is being offered for sale without
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
an asking price. All investors should base their offer and price on the “As is,
38
Headquarters. Total Rentable Area (as-leased): Percentage Leased:
84,250 RSF 100.00%
Year 1 Projected Net Operating Income:
$1,619,814
Year 2 Projected Net Operating Income:
$1,667,844
The following information is provided in the Financial Analysis and Tenant Overview Section to assist investors in their initial underwriting. •
Financial Summary
•
Eleven-Year Cash Flow Projection
•
Supporting Schedules
•
Rent Roll
-
CY 2018 CY 2019 CY 2020 CY 2021+
Tenant Improvements:
$25.00 PSF New / $10.00 PSF Renewal It is assumed $35.00 will be necessary for new deals upon the first rollover for Building B.
Leasing Commissions:
$7.50 PSF New / $5.00 PSF Renewal
CPI/Inflation Rate:
3% Annually
Real Estate Tax Growth Rate and Treatment:
Growth rate is 3% annually. Note that real estate taxes have not been reassessed.
General Vacancy:
5% of potential gross revenue. Continental Mills is excluded from general vacancy loss.
The cash flow period begins January 1, 2017 and has been prepared using Argus DCF software v15.
REVENUE LINE ITEM ASSUMPTIONS Roof Fee Income:
Roof Fee Income is per the 2016 budget, assumed to remain flat through the term of the analysis.
OPERATING EXPENSES Year 1 and Year 2 projected operating expenses are summarized in the chart below: Projected Year 1
Projected Year 2
Landscaping
(0.12)
(9,962)
(10,260)
Repairs & Maintenance
(0.12)
(10,489)
(10,803)
Security
(0.01)
(460)
(473)
Utilities
(0.09)
(9,235)
(9,512)
Other Property Expenses
(0.00)
(72)
(74)
Management Fee
(0.23)
(19,212)
(19,784)
Insurance
(0.25)
(20,660)
(21,280)
Real Estate Taxes
(2.00)
(168,771)
(173,834)
TOTAL OPERATING EXPENSES
(2.82)
(238,861)
(246,020)
FINANCIAL ANALYSIS
Year 1 PSF
MANAGEMENT FEE Management Fee expense is calculated as 1.0% of Base Rent, plus a 15% Work Fee charged on all Repairs & Maintenance and Landscaping expenses.
REAL ESTATE TAXES Real Estate Taxes are estimated based on the CY 2016 bills and have not been reassessed to reflect a sale.
CAPITAL RESERVES Capital Reserves are calculated at $0.20 per square foot per year. Year 1 projected operating expenses are based on the operating expenses provided by management for 2016, grown at 3%. All expenses increase by 3.0% on an annual basis.
39
CASH FLOW PROJECTIONS Calendar Year
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
83.33%
100.00%
Overall Economic Occupancy [1]
99.98%
99.99%
99.99%
99.99%
99.99%
99.99%
99.99%
99.99%
99.99%
61.60%
95.00%
Weighted Average Market Rent
$17.18
$17.70
$18.23
$18.78
$19.34
$19.92
$20.52
$21.13
$21.77
$22.42
$23.09
Weighted Average In Place Rent [2]
$19.16
$19.73
$20.15
$20.60
$21.67
$22.44
$23.11
$23.91
$24.61
$15.76
$22.67
$2.84
$2.92
$3.01
$3.09
$3.19
$3.29
$3.39
$3.49
$3.59
$3.58
$3.78
Physical Occupancy
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
Total Operating Expenses PSF Per Year
40
[3] CY 2017 REVENUES
$/SF/YR
Scheduled Base Rent Gross Potential Rent
$1,614,441
$1,662,470
$1,698,030
$1,735,590
$1,825,758
$1,890,176
$1,947,208
$2,014,118
$2,073,146
$1,956,424
$1,909,974
Absorption & Turnover Vacancy
0.00
0
0
0
0
0
0
0
0
0
(314,818)
0
Base Rent Abatements
0.00
0
0
0
0
0
0
0
0
0
(535,191)
0
1,614,441
1,662,470
1,698,030
1,735,590
1,825,758
1,890,176
1,947,208
2,014,118
2,073,146
1,106,415
1,909,974 318,413
Total Scheduled Base Rent
$19.16
19.16
Expense Reimbursements
2.84
238,861
246,021
253,262
260,725
268,925
277,092
285,407
294,053
302,863
251,383
Roof Fee Income
0.07
5,656
5,656
5,656
5,656
5,656
5,656
5,656
5,656
5,656
5,656
5,656
TOTAL GROSS REVENUE
22.06
1,858,958
1,914,147
1,956,948
2,001,971
2,100,339
2,172,924
2,238,271
2,313,827
2,381,665
1,363,454
2,234,043
General Vacancy Loss
(0.00)
(283)
(283)
(283)
(283)
(283)
(283)
(283)
(283)
(283)
0
(111,702)
22.06
1,858,675
1,913,864
1,956,665
2,001,688
2,100,056
2,172,641
2,237,988
2,313,544
2,381,382
1,363,454
2,122,341
EFFECTIVE GROSS REVENUE OPERATING EXPENSES Landscaping
(0.12)
(9,962)
(10,260)
(10,569)
(10,886)
(11,212)
(11,549)
(11,895)
(12,252)
(12,620)
(12,998)
(13,388)
Repairs & Maintenance
(0.12)
(10,489)
(10,803)
(11,128)
(11,461)
(11,805)
(12,160)
(12,524)
(12,900)
(13,287)
(13,685)
(14,096)
Security
(0.01)
(460)
(473)
(488)
(502)
(518)
(533)
(549)
(565)
(583)
(600)
(618)
Utilities
(0.11)
(9,235)
(9,512)
(9,798)
(10,092)
(10,394)
(10,706)
(11,027)
(11,358)
(11,699)
(12,050)
(12,411)
Other Property Expenses
(0.00)
(72)
(74)
(76)
(79)
(81)
(84)
(86)
(88)
(91)
(94)
(97)
Management Fee
(0.23)
(19,212)
(19,784)
(20,235)
(20,708)
(21,710)
(22,458)
(23,135)
(23,914)
(24,618)
(15,067)
(23,222)
Insurance
(0.25)
(20,660)
(21,280)
(21,918)
(22,576)
(23,253)
(23,950)
(24,669)
(25,409)
(26,171)
(26,956)
(27,766)
Real Estate Taxes
(2.00)
(168,771)
(173,834)
(179,049)
(184,421)
(189,953)
(195,652)
(201,522)
(207,567)
(213,794)
(220,208)
(226,814)
TOTAL OPERATING EXPENSES
(2.84)
(238,861)
(246,020)
(253,261)
(260,725)
(268,926)
(277,092)
(285,407)
(294,053)
(302,863)
(301,658)
(318,412)
NET OPERATING INCOME
19.23
1,619,814
1,667,844
1,703,404
1,740,963
1,831,130
1,895,549
1,952,581
2,019,491
2,078,519
1,061,796
1,803,929 0
CAPITAL COSTS Tenant Improvements
0.00
0
0
0
0
0
0
0
0
0
(1,316,101)
Leasing Commissions
0.00
0
0
0
0
0
0
0
0
0
(604,600)
0
(16,850)
(17,356)
(17,876)
(18,412)
(18,965)
(19,534)
(20,120)
(20,723)
(21,345)
(21,985)
(22,645)
Capital Reserves
(0.20)
TOTAL CAPITAL COSTS
(0.20)
(16,850)
(17,356)
(17,876)
(18,412)
(18,965)
(19,534)
(20,120)
(20,723)
(21,345)
(1,942,686)
(22,645)
OPERATING CASH FLOW
$19.03
$1,602,964
$1,650,488
$1,685,528
$1,722,551
$1,812,165
$1,876,015
$1,932,461
$1,998,768
$2,057,174
($880,890)
$1,781,284
[1] This figure takes into account vacancy/credit loss, absorption vacancy, turnover vacancy, and base rent abatements. [2] This figure does not include any amount related to expense reimbursements. Only Scheduled Base Rent and Fixed/CPI Increases are included in this calculation, which is based on the weighted-aver age physical occupancy during each fiscal year. [3] Based on 84,250 square feet.
IN-PLACE AND PROJECTED NOI SUMMARY In-Place NOI
Pro Forma NOI
Jan-17, Annualized
$ PSF
Size of Improvements
Jan-17 to Dec-17
$ PSF
84,250 SF
84,250 SF
REVENUES Scheduled Base Rent Gross Potential Rent
$1,565,004
$18.58
$1,614,441
$19.16
Absorption & Turnover Vacancy
0
0.00
0
0.00
Base Rent Abatements
0
0.00
0
0.00
1,565,004
18.58
1,614,441
19.16
238,848
2.83
238,861
2.84
5,652
0.07
5,656
0.07
Total Scheduled Base Rent Expense Reimbursements Roof Fee Income TOTAL GROSS REVENUE
1,809,504 [1]
1,858,958
22.06
0.00
(283)
(0.00)
EFFECTIVE GROSS REVENUE
1,809,504
21.48
1,858,675
22.06
OPERATING EXPENSES Landscaping
(9,960)
(0.12)
(9,962)
(0.12)
(10,488)
(0.12)
(10,489)
(0.12)
Security
(456)
(0.01)
(460)
(0.01)
Utilities
(9,228)
(0.11)
(9,235)
(0.11)
(72)
(0.00)
(72)
(0.00)
Management Fee
(18,720)
(0.22)
(19,212)
(0.23)
Insurance
(20,664)
(0.25)
(20,660)
(0.25)
(168,768)
(2.00)
(168,771)
(2.00)
(238,356) [2]
(2.83)
(238,861)
(2.84)
$18.65
$1,619,814
$19.23
Repairs & Maintenance
Other Property Expenses
Real Estate Taxes TOTAL OPERATING EXPENSES NET OPERATING INCOME
$1,571,148
FINANCIAL ANALYSIS
21.48
0
General Vacancy Loss
41 In-Place Occupancy (At Start of Analysis With No Vacant Lease-Up) Average Occupancy (Includes Vacant Lease-Up and Rollover)
100.00%
100.00%
-
100.00%
Notes: [1] In-Place Net Operating Income is calculated using contractual rents and expense reimbursements as of January 2017, Annualized (with no General Vacancy Loss). In-Place NOI does not include vacant lease-up revenue, downtime due to near-term expirations, or future rent increases for existing tenants. [2] Real Estate Taxes in this analysis are not reassessed based on the sales price, but rather are equal to the most recent available tax bills (plus estimated inflation).
RENT ROLL
CONTINENTAL MILLS CORPOR ATE HEADQUARTERS
Market Suite
Tenant Name
Square Feet
Bldg A
Continental Mills (Bldg A)
26,682
% of Property 31.67%
Lease Term Begin End May-2011
Apr-2026
Begin
Rental Rates Monthly PSF Annually
PSF
Recovery Type
Market Rent
Current
$16,676
$0.63
$200,115
$7.50
NNN + 15%
Market
May-2017
$20,012
$0.75
$240,138
$9.00
Work Fee
$16.50 NNN
May-2021
$26,682
$1.00
$320,184
$12.00
(Bldg A)
(A)
May-2023
$28,906
$1.08
$346,866
$13.00
May-2024
$31,129
$1.17
$373,548
$14.00
May-2025
$32,241
$1.21
$386,889
$14.50
Notes: Two (2) 5-year options at 95% FMV. TT has ROFO to purchase building if LL elects to sell as single parcel or if an offer is received. Reimburses management fee equal to 1% of Base Rent (modeled). Tenant reimburses a work fee equal to 15% of R&M and Landscaping expenses (modeled). Bldg B
Continental Mills (Bldg B)
57,568
68.33%
May-2011
Apr-2026
Current
$113,741
$1.98
$1,364,892
$23.71
NNN + 15%
Market $17.50 NNN (B) [$35 TI-N 1st]
May-2017
$116,575
$2.03
$1,398,902
$24.30
Work Fee
May-2018
$119,502
$2.08
$1,434,019
$24.91
(Bldg B)
May-2019
$122,476
$2.13
$1,469,711
$25.53
May-2020
$125,690
$2.18
$1,508,282
$26.20
May-2021
$128,664
$2.24
$1,543,974
$26.82
May-2022
$131,927
$2.29
$1,583,120
$27.50
May-2023
$135,189
$2.35
$1,622,266
$28.18
May-2024
$138,595
$2.41
$1,663,140
$28.89
May-2025
$142,049
$2.47
$1,704,588
$29.61
Notes: Two (2) 5-year options at 90% FMV. TT has ROFO to purchase building if LL elects to sell as single parcel or if an offer is received. Reimburses management fee equal to 1% of Base Rent (modeled). Tenant reimburses a work fee equal to 15% of R&M and Landscaping expenses (modeled). It is assumed $35 PSF is required upon initial roll if TT vacates.
42
Assumption /
TOTALS / AVERAGES
84,250
OCCUPIED SqFt
84,250
100.0%
0
0.0%
84,250
100.0%
VACANT SqFt TOTAL SqFt
WEIGHTED-AVERAGE LEASE TERM REMAINING:
$130,417
9.33 Years
WEIGHTED-AVERAGE LEASE TERM LAPSED:
5.67 Years
WEIGHTED-AVERAGE LEASE TERM FROM INCEPTION:
15.00 Years
$1.55
$1,565,007
$18.58
FINANCIAL ANALYSIS
43
CO N T I N E N TA L M I L L S
INVESTMENT CONTACTS
LEASING MARKET CONTACT
TOM PEHL
LOU SENINI
GEOFF PENDERGAST
Senior Vice President
Senior Vice President
First Vice President
Lic. 0007850
Lic. 0007024
+1 425 462 6950
206 442 2722
206 292 6050
geoff.pendergast@cbre.com
tom.pehl@cbre.com
lou.senini@cbre.com
BRETT HARTZELL
TAYLOR ODEGARD
Executive Vice President
Manager, Capital Markets
VAL ACHTEMEIER
Lic. 0005876
Lic. 112227
Executive Vice President
+1 206 292 6100
+ 1 206 292 6104
Lic. 01868169
brett.hartzell@cbre.com
taylor.odegard@cbre.com
+1 213 613 3109
DEBT & STRUCTURED FINANCE
val.achtemeier@cbre.com
DARLA LONGO
BARBARA EMMONS
Vice Chairman
Vice Chairman
Lic. 00639911
Lic. 00969169
+1 909 418 2105
+1 213 613 3033
darla.longo@cbre.com
barbara.emmons@cbre.com
CBRE, INC.
Š 2016 CBRE, Inc. The information contained in this document has been obtained from sources believed reliable. While CBRE, Inc. does not doubt its accuracy, CBRE, Inc. has not verified it and makes
Broker Lic. 00409987
no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for
1420 Fifth Avenue, Suite 1700
example only and do not represent the current or future performance of the property. The value of this transaction to you depends on tax and other factors which should be evaluated by your tax,
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financial and legal advisors. You and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.