C a sc a de Ba nk Building INVESTMENT OFFERING - OFFERING PRICE $4,600,000 1 0 5 5 N W M A P L E S T, I S S A Q U A H , W A S H I N G T O N 17,346 RSF CLASS-A OFFICE
Table of Contents EXECUTIVE SUMMARY . . . . . . . . 3 The Offering . . . . . . . . . . . . . . . . . . 3 Investment Highlights. . . . . . . . . . . . 4
PROPERTY OVERVIEW. . . . . . . . . 5 Property Description. . . . . . . . . . . . . 5 Floor Plans. . . . . . . . . . . . . . . . . . . . 6
FINANCIAL OVERVIEW . . . . . . . . 7 Rent Roll. . . . . . . . . . . . . . . . . . . . . 7 Tenant Profiles. . . . . . . . . . . . . . . 8-9
MARKET OVERVIEW. . . . . . . . . 10 Puget Sound Investment Market. . 10 Competitive Properties. . . . . . . . . . 11 Sale Comparables. . . . . . . . . . . 12 Office Market Overview. . . . 13-18
DISCLAIMER . . . . . . . . . . . . . . 19
CASCADE BANK BUILDING
EXECUTIVE SUMMARY
3
The Offering Pacific Real Estate Partners is pleased to present for sale the Cascade Bank Building in Issaquah, WA. This building is located in the heart of the Issaquah commercial center, one block west of the Target anchored Issaquah Commons Shopping Center. The property consists of two floors with a drive-thru banking facility “cut out” through the middle of the building’s first floor. The building totals 17,346 RSF and currently has six tenants, including Cascade Bank. The Seller, Cascade Bank, will lease back approximately 3,841 RSF of the building on a new 10-year triple net lease, commencing on the close of the property sale. Cascade Bank is a regional bank with 22 branch locations throughout the Puget Sound. With projected vacancy in the building to be roughly 7,500 RSF by the first quarter of 2011, there is upside for an investor to create value given the historical Issaquah market rent trend which is currently achieving rents in the low $20/SF triple-net range. The vacancy also provides an owner user the opportunity to occupy a portion of the building while still collecting rents from the in place tenant leases.
CASCADE BANK BUILDING
EXECUTIVE SUMMARY
4
Investment Highlights » Investor value creation in retenanting the vacant space given the historical rental rate strength of the Issaquah
market versus the greater market. Current lease comparables for Class-A office space in Issaquah justify $20.00 psf net rents. »» Ideal user/investor investment with up to 7,500 RSF of space available for user to occupy while collecting rent on balance of the building »» Premier location with easy access to I-90, housing, retail, and service amenities »» Marquee building exposure on Maple Street, with prominent building and monument signage
CASCADE BANK BUILDING
PROPERTY OVERVIEW
5
Property Description The Cascade Bank Building (“Property”) is a two-story, 17,346 RSF, Class-A suburban office building with frontage exposure on Maple Street and bordering Issaquah’s central retail district. The property also sits in close proximity to residential areas, making this a premier location with easy access to retail service facilities as well as easy ingress and egress to I-90. Address
1055 NW Maple Street, Issaquah, WA
Size
17,346 RSF (subject to BOMA verification; this includes a 16.3% load factor) Two floors Full-span upper floor – 9,283 RSF Main floor is divided by a drive-through for the bank – 8,063 RSF
Parking Stalls
3.9/1,000 RSF
Year Built
1995 – originally a build-to-suit of approximately 6,202 RSF for Issaquah Bank 2003 – building expansion of approximately 11,144 RSF
Construction
Foundation: Seven inch reinforced concrete slab on grade over 6 mil vapor barrier over granular fill; concrete stem wall at base of building; foundation is secured with pilings Framing: Steel stud exterior wall framing – 16”on center; Second floor framing is 7/8” metal decking with 21/8” concrete cover. Interior framing is steel studs 16” on center. Exterior: EIFS with aluminum storefront accents and metal canopy at the entrance; R-19 batt insulation on exterior walls.
Windows
Insulated glass in aluminum frames
Interior Finishes
Finished sheetrock and suspended acoustic ceilings; 2x4 recessed fluorescent lights with parabolic lens covers or recessed can lights; Floor coverings are a combination of carpet, tile and vinyl; open stairwells in each lobby with metal post/wood capped handrail
Roof
Metal decking over steel joists with R-30 rigid insulation under the metal decking; Installed 4/23/03
HVAC
Three Lennox roof-top package units; 28.5 ton total capacity; RTU -1: 15 ton unit serves the second floor; RTU – 2: 8.5 ton unit serves the first floor; RTU – 3: 5 ton unit serves the two-story lobby & second floor corridor.
Restrooms
Floor Floor Floor Floor
Elevators
One hydraulic elevator in North area building area
Fire/Life Safety
Building is fully sprinklered
Drive-thru Teller
Three lanes (1 ATM and 2 Teller lanes) All are covered with lighting and penetrate the center of the building on the 1st floor
Architect
Baylis Brand Wagner
1 1 2 2
North – internal to Cascade Bank South – two (1 men’s/1 women’s) ADA North – two (1 men’s/1 women’s) ADA South - two (1 men’s/1 women’s) ADA
CASCADE BANK BUILDING
PROPERTY OVERVIEW
SUITE 103 2,835 RSF
Floor Plans
SUITE 101 3,673 RSF
EXISTING DRIVE-UP LANES
SUITE 102 1,555 RSF SUITE 103 2,835 RSF SUITE 101 3,673 RSF
EXISTING DRIVE-UP LANES
SUITE 102 1,555 RSF
FLOOR ONE SUITE 203 2,600 RSF SUITE 200 1,426 RSF
SUITE 204/206 1,053 RSF BANK BREAKROOM
SUITE 208 639 RSF SUITE 202 1,164 RSF
SUITE 203 2,600 RSF SUITE 200 1,426 RSF
SUITE 204/206 1,053 RSF BANK BREAKROOM
SUITE 208 639 RSF SUITE 202 1,164 RSF
SUITE 201 2,233 RSF
FLOOR TWO
SUITE 201 2,233 RSF
6
CASCADE BANK BUILDING
FINANCIAL OVERVIEW
7
RENT ROLL (as of November 1, 2010) TENANT INFORMATION
BASE RENT
Tenant Name
Suite #
Lease Start
Lease Expiration
SF
Cascade Bank
101
11/1/10
10/31/20
3,841
International Fidelity Insurance Company
Sleep Innovations
Kinley Corporation
Old Republic Title Residence Mortgage
102
201
202
12/1/09
8/1/08
11/1/08
11/30/12
7/31/13
10/31/13
1,555
2,233
1,164
Date 11/1/10
SF
$/SF
Current Rent/Yr
Recovery Method
3,841
$24.00
92,184
Net
36,540
Net
61,596
Net
29,640
Net
11/1/11
$24.72
11/1/12
$25.46
11/1/13
$26.22
11/1/14
$27.01
11/1/15
$27.82
11/1/16
$28.66
11/1/17
$29.51
11/1/18
$30.40
11/1/19
$31.31
11/1/10
1,555
$23.50
12/1/10
$24.21
12/1/11
$24.93
11/1/10
2,233
$27.58
8/1/11
$28.41
8/1/12
$29.26
11/1/10
1,164
$25.46
11/1/11
$26.23
11/1/12
$27.01
203
4/1/09
1/31/11
2,600
11/1/10
2,600
$22.66
58,920
Net
204 & 206
12/1/08
11/30/13
1,053
11/1/10
1,053
$20.50
21,588
Net
Vacant Suite (Orthodontist Office)
103
2,835
Vacant Suite
208
639
Vacant Suite
200
1,426
12/1/10
$21.12
12/1/11
$21.74
12/1/12
$22.40
CASCADE BANK BUILDING
FINANCIAL OVERVIEW
8
TENANT PROFILES CASCADE BANK Cascade Financial Corporation (Nasdaq: CASB) is the parent company of Cascade Bank. Cascade Bank is a full-service community bank headquartered in Snohomish County, Washington. The region has a strong economic base with diverse sectors including manufacturing, software, military and services. Boeing is the largest employer in the area and the Snohomish County market is home to 23% of all Washington state biotech and biomedical companies. Other large employers include the U.S. Navy, Premera Blue Cross, Goodrich, Philips, Fluke and Verizon. Cascade Bank operates 22 full-service branches in Snohomish, King and Skagit Counties, located in Edmonds, Everett, Lynnwood, Marysville, Mukilteo, Shoreline, Smokey Point, Issaquah, Clearview, Woodinville, Lake Stevens, Bellevue, Snohomish, North Bend and Burlington.
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FINANCIAL OVERVIEW
9
TENANT PROFILES CONT’D INTERNATIONAL FIDELITY INSURANCE COMPANY International Fidelity Insurance Company (IFIC) has achieved both net income and underwriting profits in each of the last seven years. The company is rated excellent A- VII by AM Best. IFIC has never paid a common stock dividend and has never had any debt on its statutory balance sheet. With over $227 million in net admitted assets (of which $220 million is cash and other invested assets) at the 2009 fiscal year end, IFIC stands ready to meet all of its obligations. IFIC’s reinsurance treaty is made up of two of the strongest reinsurers in surety, both of which have been assigned the highest rating possible by AM Best: A+ XV. SLEEP INNOVATIONS Founded in 1996, Sleep Innovations is a leader in the design and production of memory foam sleep products - with a special emphasis on pillows, mattress toppers, and mattresses. In addition, Sleep Innovations creates memory foam accessories - for dorm rooms, bedrooms, leisure and travel. Sleep Innovations products can be found at your local Department store such as (Kohl’s, Macy’s and Sears) along with Warehouse Club stores, online retailers and mass merchandisers. KINLEY CORPORATION Kinley Corporation is a commercial, industrial and residential contractor and developer, with its corporate office located in Olean, New York. The Issaquah office serves as a satellite office for Kinley Corporation. OLD REPUBLIC TITLE INSURANCE GROUP Officially licensed in the state of Washington in 1982, Old Republic Title Insurance Group provides title insurance policies and related real estate transaction and mortgage lending products and services to individual consumers, mortgage lenders, businesses and government agencies. RESIDENCE MORTGAGE CORPORATION Residence Mortgage Corporation is a full service mortgage broker serving the mortgage needs of Washington home buyers and home owners since June of 1997. Resident Mortgage employees service the needs of homeowners in the surrounding Issaquah residential markets.
CASCADE BANK BUILDING
MARKET OVERVIEW
10
Puget Sound Investment Market The Puget Sound Region is one of the most dynamic real estate investment markets in the country. It benefits from a combination of strict land use planning, topographical constraints on supply, and employment growth that consistently ranks above the national average. A diversified economic base of technology, manufacturing and service industry leaders generates the demand for space in the Puget Sound Region. Blue chip firms such as Microsoft, Amazon.com, Boeing, Starbucks, Safeco, Nintendo, REI, PACCAR, Puget Sound Energy, and Weyerhaeuser stabilize the regional economy and provide consistent demand for support services. Joining this illustrious group are Google and Yahoo!, further demonstrating the Region’s appeal and economic strength. In addition, as the closest American port to all Pacific Rim trading partners, the Seattle metro area continues to experience robust growth in the wholesale and retail trade sectors. Imports entering the United States’ distribution system at the Ports of Tacoma and Seattle also factor into the region’s economic health. Looking forward, the Puget Sound leading index reflects an increase in manufacturing hours, improvement in the Boeing backlog-delivery ratio and growth in real durable goods spending from the third quarter of 2010. The current Economic Forecaster is also predicting the creation of approximately 26,000 jobs in 2011. (Puget Sound Economic Forecaster, September 2010). While the region experienced economic woes, these figures show that we are still on track for recovery; however it will not be exceptionally quick.
CASCADE BANK BUILDING
MARKET OVERVIEW
Competitive Properties Property
Size
Leased
Asking Rates (Year 1/NNN)
Parking Ratio
John L. Scott Building 1700 NW Gilman Blvd. Issaquah, WA
27,400 RSF Two Floors
95%
$26.00/NNN
4.0/1,000
HighMark Medical Center 1740 NW Maple St. Issaquah, WA
46,045 RSF Two Floors
37% (Built in 2010)
$30.00/NNN
4.25/1,000
Jordan Creek Office Center 5825 221st Pl. SE Issaquah, WA
19,756 RSF Two Floors
100%
No space available
3.1/1,000
Juniper Street Professional Center 710 NW Juniper St. Issaquah, WA
26,325 RSF Two Floors
93%
No space available
4.0/1,000
53,000 RSF Two Buildings Two Floors each
87%
$26.00/NNN
4.2/1,000
Sammamish View Office Building 22605 SE 56th St. Issaquah, WA
29,550 RSF Two Floors
76%
$16.00/NNN
4.0/1,000
Maple Street Building 1180 NE Maple St. Issaquah, WA
110,000 RSF Three Floors
92%
$22.00/NNN
3.5/1,000
Liberty Park Building 371 NE Gillman Blvd. Issaquah, WA
43,923 RSF Three Floors
73%
$18.00/NNN
4.2/1,000
Lakeside Building II 6520 226th Place SE Issaquah, WA
20,944 RSF Two Floors
87%
$26.00/NNN
5.5/1,000
Eastpointe 22833 SE Black Nugget Rd. Issaquah, WA
156,393 RSF Three Floors
94%
$20.00/NNN
3.8/1,000
I-90 Lake Place II 1605 NW Sammamish Rd. Issaquah, WA
96,588 RSF Three Floors
87%
$18.50/NNN
4.0/1,000
Meadow Creek Building G&H 22500 & 22525 SE 64th Pl. Issaquah, WA
11
CASCADE BANK BUILDING
MARKET OVERVIEW
Sale Comparables Sale Date
RSF Year Built
Sale Price Price/SF
Cap Rate
Buyer/Seller
Comments
Pacific Corporate Center 13555 SE 36th St. Bellevue, WA
12/09
84,037 1987
$12,750,000 $152.00/SF
N/A
Routh Crabtree Olsen/ Invesco
Owner-User
I-90 Lake Place II 1605 NW Sammamish Rd. Issaquah, WA
3/09
96,588 1992
$20,337,000 $211.00/SF
N/A
Costco Wholesale Corporation/ Dayhu Investments
Owner-User
14100 Building 14100 SE 36th St. Bellevue, WA
9/08
21,090 1986
$6,000000 $285.00/SF
6.5%
Northwest Commercial Real Estate Investment/ Morris Piha Real Estate
Multi-tenant Local Investor
OGS Plaza 15885 NE 28th Pl. Bellevue, WA
6/08
12,020 1999
$4,600,000 $383.00/SF
N/A
Rena Ware Bellevue LLC/ Odegard Gockel Construction
Owner-User
Advanta Office Commons 3005 160th Ave SE Bellevue, WA
7/10
636,322 2008
$240,000,000 $377.17/SF
6.8%
J.P. Morgan Asset Management/ Schnitzer West
Owner-User 3 Building Campus
Legacy I-90 Campus North 3350-3460 161st Ave SE Bellevue, WA
4/10
90,725 1982
$27,000,000 $297.60/SF
9.25%
TA Associates Realty/ Legacy Partners
2 Building Campus
Property
12
CASCADE BANK BUILDING
MARKET OVERVIEW
13
Office Market Overview PUGET SOUND OFFICE REAL ESTATE The Puget Sound has perennially been one of the strongest office markets nationally; however the recent economic recession truly tested its positive history. With a large contingency of high-tech companies in the region, as well as business professionals, the Puget Sound office market has flourished in the last decade and is home to many of the world’s most successful Fortune 500 companies. The Puget Sound’s dedication towards environmental friendly building has enabled it to achieve nearly 18 million LEED certified square feet in 70 buildings, three of which are certified LEED Platinum. Regional Class-A vacancy has increased 8.8% over the last eight quarters with a corresponding decrease in full service rental rates of $6.96/SF over this same time period. Regional Class-A annual office positive net absorption has averaged 890,000 RSF since 2000. PUGET SOUND CLASS-A: 3Q 2010 Market
RBA
Direct Vacancy
Total Vacancy
Net Absorption YTD
Downtown Seattle
30,580,182
17.7%
18.7%
703,385
Eastside
13,701,819
14.2%
16.4%
40,183
Northend
1,196,857
20.4%
23.0%
(29,684)
Southend
1,088,036
5.9%
7.1%
(4,348)
Tacoma
1,140,122
7.0%
7.0%
(19,373)
Total Puget Sound
47,707,016
16.2%
17.6%
690,163
Owner/User Excluded Source: CoStar 3Q 2010
CASCADE BANK BUILDING
MARKET OVERVIEW
14
Office Market Overview Cont’d EASTSIDE OFFICE REAL ESTATE The Eastside Office market is among one of the more unique markets in the region. With tech giants like Microsoft, Expedia, Nintendo and T-Mobile, this market has a large concentration of high-tech R&D space. Recent years have seen booming growth in the city of Bellevue, which has established itself as a contender for office tenants in the area. The eastside is one of the more affluent areas in the country boasting a high education level, household income and average house value. With excellent commerce and large local businesses, this area remained resilient during the recent recession and continues to gain strength. The City of Bellevue boasts a 6.4% Unemployment Rate (BLS), which is 1.3% lower than King County’s present unemployment rate of 7.7% and 2.3% lower than Washington State’s at 8.7%. The Eastside Market is highly desirable for suburban investment as existing constraints on supply combine with a history of explosive employment growth creating significant increases in underlying values. Historical growth in demand for office space illustrates that the area offers employers several compelling advantages including access to a talented labor pool, superior transportation infrastructure, flexible commute patterns, and a diverse residential inventory which provides high-end executive housing as well as mid-price-point single and multi-family communities. This market is home to over 3,000 corporate users that occupy 44 million square feet which is spread between tenants and owner/users. Today’s growth companies, in addition to the Fortune 500 companies of Microsoft, Boeing, Costco and Nintendo have quickly become industry leaders and are scattered across the Seattle Eastside. Household names such as Microsoft, T-Mobile, Expedia.com, Google, Yahoo! and hundreds of other companies are the direct result of the Seattle Eastside’s unparalleled intellectual capital focused on technology and telecommunications. EASTSIDE CLASS-A: 3Q 2010 Market I-90 Corridor Issaquah Bellevue CBD 520 Corridor
RBA
Direct Vacancy
Total Vacancy
Net Absorption YTD
2,513,504
15.3%
15.3%
47,932
809,925
3.9%
12.7%
(50,606)
7,146,621
12.6%
14.5%
(77,554)
397,635
26.3%
26.3%
-
Kirkland
1,276,968
15.6%
21.2%
63,785
Redmond
1,411,549
18.0%
19.7%
71,240
44,000
100.0%
100.0%
-
101,617
27.7%
28.5%
(11,463)
13,701,819
14.2%
16.4%
40,183
Suburban Bellevue Mercer Island Total Eastside Owner/User Excluded Source: CoStar 3Q 2010
CASCADE BANK BUILDING
MARKET OVERVIEW
15
Office Market Overview Cont’d EASTSIDE OFFICE SUMMARY - CLASS A - 3Q 2010 The Eastside Class-A Office market consists of nearly 13.6 million SF of non owner/user space contingent in nearly 90 properties. Direct vacancy is 14.2% with a total availability rate of 16.4%, down 60 basis points since 4Q 2009. Current average quoted NNN rental rates in Bellevue and the Eastside markets are approximately $25-31/SF/YR/NNN. Growth has been widespread in the Eastside from downtown to the I-90 Corridor. Companies like Intellectual Ventures took 158,000 SF in the I-90 Corridor and Microsoft took 64,137 SF in the CBD in the first quarter of 2010. Overall the market has seen decreased vacancy with increased absorption and rental rates over the course of 2010. TOP LEASES SIGNED IN AREA BUILDING
TENANT
SF
Sunset North IV
Intellectual Ventures
158,875
Lincoln Square I -Office Tower
Microsoft Corporation
64,137
Lake Washington Park
Demand Media
34,146
Civica Office Commons-North Tower
Apptio
22,502
Plaza East
Talyst
19,079
5000 Carillon Point
Taiyo
18,410
City Center Bellevue
Intellus, Inc.
18,066
ISSAQUAH SUBMARKET First settled by the Coast Salish Native American Indians, Issaquah has grown from a railroad depot in the late 1800s transporting hops, mail, freight, livestock and passengers across Lake Washington - to a Seattle bedroom community, balancing its small-town heritage with the demands of its corporate residents. Microsoft, Siemens, Boeing, Federal Express and Costco Wholesale – who’s international headquarters is located in Issaquah – co-exist with many local professional service firms including Bayley Construction, Baima & Holmberg (Engineering & Land Surveyors), InForm (Architecture & Design), Tate & Oellrich, Inc. (Accounting), Carson & Nuel, PLLC (Attorneys) as well as nationally recognized retailers Home Depot, Fred Meyer, Barnes & Noble, Linens ‘n Things and Office Depot. The local retail center Pickering Place is a massive retail complex consisting of the aforementioned businesses and buzzes with activity year round. Just east of Issaquah is one of the more recent successes in the residential sector with the booming growth of Snoqualmie Ridge housing development. The 1,343 acre site sits beneath 2,200 homes developed in phase I of the project which saw alarming demand on delivery.
CASCADE BANK BUILDING
MARKET OVERVIEW
16
Office Market Overview Cont’d Office Market Overview. With 810,000 RSF of Class-A office space, the Issaquah submarket accounts for approximately 5.9% of the Eastside’s Class-A market. Current total vacancy is less than 8.7% with market rates averaging $28/SF/ YR/FS or $20/SF/YR/NNN. Historically Issaquah has fared well amidst changing market conditions, and is now on the recovery from the 2008 recession now down 3.1% from its 4Q 2008 high of 11.8%. American Family Insurance’s recent 21,700 SF lease at Eastpointe Corporate Center and Procter & Gamble’s 10,600 SF lease at the Maple Street Office Building gave this market excellent momentum moving into the fourth quarter of 2010. Area Overview. Issaquah’s population of nearly 11,200 citizens call this place home due to its quaint charm, accessibility to the metropolitan centers of Bellevue and Seattle, proximity to Interstate 90, adjacent housing (apartments, town homes, condominiums, starter homes and executive housing) an award-winning school district and excellent medical care provided by Swedish Medical Center’s 24-hour free-standing emergency room and Overlake Medical’s Urgent Care Center. Issaquah’s Community Center provides year-round programming including preschool care and activities, after-school youth activities, computer facilities and career counseling. The four-block Rainier Avenue civic corridor includes the Julius Boehm Swimming Pool, Trails Center, historic Railroad Depot in addition to the Community Center and Memorial Field Park. Issaquah Salmon Days Festival celebrates the annual arrival of the chinook, coho and sockeye salmon and serves as the primary fund-raising activity for the Chamber of Commerce. A leading regional producer of musical theater in the Pacific Northwest, the Village Theater was founded in 1979 and is a favorite of Eastside residents. PUGET SOUND REGIONAL OVERVIEW Population. The Puget Sound region is composed of four counties with a total population of approximately 3.58 million residents. The greater Seattle metro area is located within King County, and with 1.88 million people living in 39 cities, this area is the heart of the Puget Sound region. Employment. Regional employment has dropped by 1% for 2010. Aerospace employment is expected to decline over the next decade while Technology is expected to steadily increase. Unemployment is expected to drop by 2.4% by 2015 and per capita personal income to increase by $11,000. Technology. Puget Sound is a global technology leader and as a dominant research and commercial force in markets such as information technology, telecommunications, and biomedical technology, Seattle is ranked fifth in the nation
CASCADE BANK BUILDING
MARKET OVERVIEW
17
Office Market Overview Cont’d for highest concentration of high-tech companies. The software and internet-related industry is a $30 billion business, and is backed by world-class research and educational institutions, large-scale service and manufacturing industries skilled in supporting technology companies, a strong and growing local venture capital community. Microsoft Corporation, the world’s leading personal computer software company, is one of 2,500 software development firms in the state with approximately 39,824 employees in the Puget Sound region and over 88,000 worldwide. They own nearly 9.8 million SF and lease nearly 5.2 million SF in the Puget Sound region alone. Biotechnology and Medical Technology. The Seattle region is a world-class center for biotechnology and has been ranked as the 5th largest biotechnology cluster in the United States by a recent study from the Milliken Institute. The region is now becoming increasingly well known as one of the premier biotechnology centers in the world. This is due to the area’s world-class research institutions, entrepreneurial spirit, governmental assistance and the region’s dynamic economy. According to the Brookings Institution, Greater Seattle’s research and development alliances are worth in excess of $690 million. Research centers and institutions are the most important factors in incubating high-tech industries. Two form the technology foundation for Washington State’s biotechnology industry: the University of Washington and the Fred Hutchinson Cancer Research Center. International Trade. Because of its deep water port and the fact that it is one shipping day closer to major Asian Pacific Rim ports, the Port of Seattle handles over 25% of all Pacific Rim imports into the United States. China and Japan are Seattle’s top waterborne trading partners and on a per capita basis, Washington conducts more international trade than any other state in the nation. Nearly 75% of Washington’s trade traffic passes through the Ports of Seattle and Tacoma. The Port of Seattle is ranked in the top ten in total dollar value of exports and among the Top 25 largest container ports in the world (EDC of Seattle and King County). Transportation. Seattle’s economy is supported by a well-developed distribution network which offers excellent access to regional, national and international markets. Combined, the Ports of Seattle and Tacoma comprise one of the nation’s largest containerized port systems. The Seattle-Tacoma International Airport, also under the direction of the Port of Seattle, is a major gateway joining Asia and Europe with the United States and is ranked among the five best U.S. airports by the International Airline Passengers Association. The airport is also consistently one of the top
CASCADE BANK BUILDING
MARKET OVERVIEW
18
Office Market Overview Cont’d 25 busiest cargo airports in the country. The Seattle area is well served by a network of surface transportation routes, including two transcontinental railroads. In addition, Metro and Sound Transit bus systems serve the greater Puget Sound area with approximately 1,200 buses and the largest public vanpool fleet in the country with over 700 vans. Sound Transit is responsible for connecting regional employment and population centers through a network of trains, buses and transit projects. Key features of this planned system include 25 miles of electric light-rail, 81 miles of commuter rail, more than 100 miles of HOV expressways, 20 new regional express bus routes and region-wide coordination of all schedules and fares among all local and regional transit services. In 2005, the Washington State Legislature passed a transportation package that will invest $7.1 billion in 274 projects throughout the state over the next 16 years. Which recently include the 520 Expansion Project and the SR-167 expansion. Tourism. Tourism is Washington State’s fourth largest industry with the Seattle Center (site of the 1962 World’s Fair) and local hotels and restaurants having gained a reputation as exciting venues for conferences and conventions. Demand has been so strong at the Washington State Convention and Trade Center, that a $146 million, 500,000 SF expansion was warranted. With approximately 7,000 hotel rooms in downtown Seattle, and 20,000 in the Seattle-King County area, the area also welcomes over 170 cruise ship visits each year. SUMMARY FORECAST: THE PUGET SOUND ECONOMIC FORECASTER ANNUAL PERCENTAGE CHANGE
2008
2009
2010
2011
Employment
0.9
-4.9
-0.7
1.9
Personal income (cur.$)
3.1
-2.0
3.0
5.2
Consumer price index
4.3
0.6
0.6
1.8
-43.0
-49.9
30.5
22.8
1.4
1.5
0.9
0.8
GDP ($05)
0.4
-2.4
3.2
3.1
Employment
-0.6
-4.3
-0.5
1.7
Personal income (cur.$)
2.9
-1.7
3.2
5.1
PUGET SOUND REGION
Housing permits Population UNITED STATES*
Consumer price index Housing starts *Source: Blue Chip Economic Indicator
3.8
-0.3
2.0
1.9
-32.9
-38.5
24.5
36.7
CASCADE BANK BUILDING
DISCLAIMER
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Disclaimer The material contained in this Offering Memorandum is confidential and for the purpose of considering the purchase of the Real Estate described herein. It is subject to the terms and provisions of the Confidentiality Agreement signed by the recipient of this material, and is not to be used for any purpose or made available to any other person without the express written consent of Pacific Real Estate Partners, Inc. (“Broker”). This Offering Memorandum was prepared on October 4th, 2010, by Broker solely for the use of prospective purchasers of Cascade Bank Building (the “Real Estate”). Neither Broker, Teachers Insurance and Annuity Association (the “Seller”) nor any of their respective officers, employees or agents, make any representation or warranty, express or implied, as to the completeness or the accuracy of the material contained in the Offering Memorandum or any of its contents, and no legal commitments or obligations shall arise by reason of this package or any of its contents. Seller reserves the right to eliminate any portion or all of the Real Estate from any offer for sale at any time prior to the completion of a binding contract of sale executed by both Seller and a prospective purchaser. Prospective purchasers of the Real Estate are advised (i) that changes may have occurred in the condition of the Real Estate since the time of this Offering Memorandum or the financial statements therein were prepared and that (ii) all financial projections are provided for general reference purposes only in that they are based on assumptions relating to the general economy, competition, and other factors beyond the control of Broker and the Seller and, therefore, are subject to material variation. Prospective purchasers of the Real Estate are advised and encouraged to conduct their own comprehensive review and analysis of the Real Estate. The Offering Memorandum is a solicitation of interest only and is not an offer to sell the Real Estate. The Seller and Broker expressly reserve the right, at their sole discretion, to reject any or all expressions of interest or offers to purchase the Real Estate, and expressly reserve the right, at their sole discretion, to terminate discussions with any entity at any time with or without notice. The Seller shall have no legal commitment or obligations to any entity reviewing the Offering Memorandum or making an offer to purchase the Real Estate unless and until a written agreement satisfactory to the Seller has been fully executed, delivered, and approved by the Seller and any conditions to the Seller thereunder have been satisfied or waived. This Offering Memorandum is confidential. By accepting the Offering Memorandum, you agree (i) that you hold and treat the Offering Memorandum and its contents in the strictest confidence, (ii) that you will not photocopy or duplicate any part of the Offering Memorandum, (iii) that you will not disclose the Offering Memorandum or any of its contents to any other entity without the prior written authorization of Broker, and (iv) that you will not use the Offering Memorandum in any fashion or manner detrimental to the interest of the Seller or Broker. The terms and conditions stated in this section will relate to all of the sections of the package as if stated independently therein. If, after reviewing this package, you have no further interest in purchasing the Properties at this time, kindly return this brochure to Broker at your earliest possible convenience.
E xclusi v ely offer ed by:
MARK FLIPPO (425) 974-4007 mark.flippo@pacific-re.com
JJ SHEPHARD (425) 974-4031 jj.shephard@pacific-re.com
CHARLIE MALLEY (425) 974-4003 charlie.malley@pacific-re.com
DAVID ABBOTT (206) 971-7018 david.abbott@pacific-re.com
This statement with the information it contains is given with the understanding that all negotiations relating to the purchase, renting or leasing of the property described above shall be conducted through Pacific Real Estate Partners, Inc. The above information, while not guaranteed, has been secured from sources we believe to be reliable.