Offering Memorandum 326 & 402 W Meeker & 405 Gowe Street · 2019. 2. 5. · Kurt Sorensen +1 206 332 1490. [email protected] Exclusively . marketed by: Offering Memorandum. 326

Kurt Sorensen+1 206 332 [email protected]

Exclusively marketed by:

Offering Memorandum

326 & 402 W Meeker & 405 Gowe StreetKent, Washington

Investment Assemblage

Join the block of two brew pubs, Starbucks, bakeries and restaurants, and a weekend Farmer’s Market

The information supplied herein is from sources we deem reliable. It is provided without any representation, warranty or guarantee, expressed or implied, as to its accuracy. Prospective Buyer or Tenant should conduct an independent investigation and verification of all matters deemed to be material, including, but not limited to, statements of income and expenses. CONSULT YOUR ATTORNEY, ACCOUNTANT OR OTHER PROFESSIONAL ADVISOR. 2018/OM/326 and 402 W Meeker and 405 Gowe Street

01Property Overview

02Market

Overview

03Investment

Analysis

04Site

Studies

05Supportive

Reports

Bellevue | Seattle | Tacomanai-psp.com

1

01Why Not Live or Work...

» 1,584 feet from the train station

» 1,700 feet from the AMC Movie Theatre

» 275 feet from a bakery

» 300 feet from a brew pub

» 1,600 feet from Kent Station Shopping Center and the Justice Center

» 200 feet & 1,100 feet from the two most sought after apartments in Kent

» 500 feet from Town Square Fountain

» 200 feet from City Hall

» 8 second jaywalk to Starbucks

01

Executive SummaryWe are offering an assemblage of three buildings in the heart of downtown Kent. It has been owned by the same family for some

forty (40) years. This Estate Sale provides the Buyer an opportunity to purchase assets based on current scheduled income and

allows the Buyer to increase rents overtime. Rents that may be well below their market value. For example, one apartment

rents for $400.00, ridiculously low. One retail store rents for $0.59 per square foot semi-gross! View the information sheets

enclosed on neighborhood rents and judge for yourself.

Where is the upside? First, there is normalizing rents by raising them to market value. The second source of upside is the

tremendous explosion of the population in downtown Kent. Hundreds of new apartments have been built and filled in the past

several years. The proximity to the train station, the new regional Justice Center, and the completion of the new Green

River College campus are within blocks of the subject property.

Lastly, the vision of Kent is to see tall buildings in downtown. The city has zoned this block Downtown Commercial

Enterprise District (DCE) and allows for tall buildings. There is no better Investment Exit Strategy (IES) than buying

well located, under-utilized, income producing the land in the heart of a city two blocks from a train station.

PRICE $2,452,000

ADDRESS326 & 402 W Meeker and 405 Gowe Street

Kent, WA

TOTAL BUILDING SIZE 19,211 square feet

LAND SIZE 24,424 square feet


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01 Property Overview

Property Profile - KCR

ADDRESS 326 W Meeker 402 W Meeker 405 Gowe Street

LAND AREA 8,699 SF 7,774 SF 7,951 SF

BUILDING SIZE 6,240 SF 7,656 SF 5,325 SF

PARCEL NUMBER 982570-0365 982570-0360 982570-0410

YEAR BUILT 1920 1920 1953 / 1986

ZONING DCE DCE DCE

SHAPERectangle

Street to street

Square

Built to lot linesSquare


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1. Train Station (22 minutes to downtown Seattle)

2. AMC Movie Theater3. Green River College - Downtown campus4. Town Square - Public Fountain Play Area5. Platform Apartments - most expensive

(PSF) apartments in Kent6. Kent Station Shopping Center7. The Dwell - second most expensive (PSF)

apartments in Kent8. Sureware Center - Home of the

Thunderbirds Hockey Team9. Regional Justice Center10. Chase Bank11. Starbucks12. Airways Brewing -The Bistro13. Sweet Themes Bakery14. Kent Public Library15. The subject property16. The subject property17. The subject property18. Police Station and City of Kent Office

Building and Courthouse


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Market OverviewThe sixth largest city in the State of Washington, Kent is at the heart of the Seattle-Tacoma Metroplex. Accessibility is Kent’s

hallmark. As this map indicates, the city is 22 minutes by train and roughly 35-40 minutes from “Everywhere Northwest”: Central

Business Districts of Seattle, Bellevue and Tacoma.

Nearly 120,000 people call Kent home. It has been named “one of the best places to live” by Seattle-Metropolitan

Magazine. A few years back, Sports Illustrated named Kent “Sportstown of the Year for Washington.” The 154,500 square foot

ShoWare Center is home to the Seattle Thunderbirds (hockey), the Tacoma Stars (soccer) and the Seattle Mist (legends football).

This offering is a key piece in the redevelopment of the two “core” blocks of downtown, a short walk to the train to Seattle and

Tacoma, Green River college, shopping, brew joints and cafes.

A once thriving agricultural area, today Kent is the fourth largest manufacturing and distribution area in the United States. Among

Kent’s top employers: Boeing operates a manufacturing plant; Amazon runs a fulfillment center; both REI and Oberto Sausage

Company operate headquarters, and several other employers include:

28,893Kent Traffic Volume

9.05%Population Growth 2016-2021

41Restaurants,

Cafes & Nightlife

93Walk Score

½block to Starbucks Coffee

1block to Platform Apartments

2 blocks to Regional Justice Center

2blocks to Kent Station

2blocks to shopping and sushi

3 blocks to AMC Theater

3 blocks to Green River College

4block to Dwell Aparments

4 blocks to Justice Center


02 Market Overview

Kent is the fifth largest city in King County with

a population of 124,435. Incorporated in

1890, the city’s population has doubled

since 1990, incorporating tens of thousands of new households and

businesses. A culturally rich destination, Kent features captivating

neighborhoods, award-winning parks, exceptional school districts

and nationally accredited police and fire departments. In recent

years, Kent has experienced impressive economic growth and is

nationally known as a prime location for manufacturing.

Kent boasts a diverse economic base. Manufacturing, distribution,

warehousing, professional services and retail companies are

all located here. This includes a growing number of large and

well-known companies, like: The Boeing Company’s Integrated

Defense Systems, WCP Solutions, Mikron Industries, Oberto

Sausage Company, Starbucks Roasting Plant, and Recreation

Equipment, Inc. (REI).

The Kent Valley is home to a growing volume of Class-A wired

office space. The Kent Valley is the 2nd largest industrial park on

the West Coast; 5th in the nation. It is the 3rd largest distribution/

warehouse area after New York/New Jersey and LA, and the

Ports of Seattle and Tacoma are the 3rd largest container hub in

the nation.

Watch the drone video on YouTube: https://youtu.be/_AnZ2X57zzs


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Located within 2 blocks of Subject Property:

The Regional Justice Center

New Dwell Apartments

Kent Station Shopping

Starbucks CoffeeGreen River College


02 Market Overview

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FAMILY RESTROOM

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KENT STATION GIFT CARDS AVAILABLE HERE

Apparel & Accessories M1 Chico's K5 Christopher & BanksB1 Claire’s Accessories M5 J.Jill L1 LOFT A3 Zumiez

ServicesN6 BECU I 5 Coldwell Banker Bain I 7 FedEx Office J9 Gentle DentalJ 5 H&R BlockI 1 Harborstone Credit UnionA13 Kent Station Chiropractic & MassageA14 Kent Station Family Dentistry K9 Portrait Innovations J3 Qliance Primary CareN Social Security Admin., suite 401 N5 VRAJ11 WFGM3 Windermere

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AMC Theatres F4 Game StopA9 Games WorkshopL4 Simply MacG1 T-MobileK12 Verizon Wireless

DiningE6 Agave Cocina & CantinaE5 Banyan Tree–Thai Cuisine D1 Chipotle Mexican Grill C1 Duke’s Chowder HouseD6 Extreme Pita F1 Johnny RocketsB3 Kigo’s Kitchen C2 Mama Stortini’s Restaurant & Bar A5 Naked PizzaG4 O Pho & Teriyaki J1 Panera Bread D3 The Ram Restaurant & BreweryN7 Reds Wine BarK11 Togo’sN3 Trapper’s Sushi N1 Wingstop

Health & FitnessK8 GNC J10 Hand & Stone Massage and Facial Spa

J14 Road Runner Sports J6 Z-Ultimate Self Defense Studios

Educational / OfficesA12 Green River College A10 Kent Station Mgmt OfficeDwell at Kent Station Apts

Café & Specialty FoodsE9 Cold Stone CreameryF3 Cow Chip Cookies H1 Dilettante Espresso & Mocha Café A7 Jamba Juice

K7 See’s Candies

Beauty, Home & GiftB2 Bath & Body Works A2 Buds & BloomsG5 HairMastersG2 Peridot Nail SalonG3 Seattle Sun Tan K6 William James Hair and Skin Studio

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Kent Station Directory Map


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406 W Meeker 328 W Meeker

407 W Gowe

03

Use Actual 2019 Rent

Apartments $58,380

Retail $95,460

Office $113,628

Totals $267,468

Address ID Bldg Size Land Size Year Built

402 W Meeker 982570-0360 7,656 SF 7,774 SF 1920

326 W Meeker 982570-0365 6,240 SF 8,699 SF 1920

405 Gowe Street 9825700410 5,325 SF 7,951 SF 1953 / 1998

Totals 19,221 SF 24,424 SF

Value Added Proforma

Proforma Rent: $342,799

Proforma Reimbursements: + $45,360

Total: $388,159

(25%) ($97,040)

$291,119

Cap Rate (7%) / 0.07

Applied Value $4,158,842

Current Gross IncomeCurrent Scheduled Rent: $267,468

2018 Actual Expenses* (95,828)

NOI: $171,640

Cap Rate (7%) / 0.07

Current Value: $2,452,000

2018 Actual ExpensesReal Estate Tax $28,906

Utilities (W/S/G/E/G) $19,418

Insurance $10,991

Property Managment (5%)* $12,852

Repairs $7,388

Tenant Improvements $10,746

Miscellaneous $5,527

Total Expenses: $95,828

$2,452,000 Sale Price / $127 PSF Building / $100 PSF Land

Investment Summary

*5% Property Management Fee ($12,852) is included in the $95,828. The current owner does not have Professional Management.


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Rent Roll - 326 W Meeker Street5 Apartments and 2 Retail Stores

Unit Tenant Type Size (SF) Term

Current Tenant Reimbursed Net

Charges Current RentCurrent Rent

PSF

326 W MeekerMexican

RestaurantRetail 1,426 2020 0 $1,325* $0.89

328 W Meeker Retail 1,526 12/31/19200incl.

$1,400 $0.89

328 (½) W Meeker 5 Apartments Apartments 2,350 Mis. 0 $4,845 $2.21

Total 2,952Total Monthly Rent:Total Annual Rent:

$8,779$75,373

$61,105Annual Income

-$16,488

2018 Actual Expenses=

$44,617 NOI

÷7%

Cap Rate=

$812,642 Value

*Rent will increase to $1,375 on 08/31/2019


03 Investment Analysis

Rent Roll - 402-406 W Meeker StreetTwo Tenants - 4 Retail Units




PSF

402 W MeekerConvenient Store MRSS

Retail 1,698 2020 0 $1,430 $0.84

404 W Meeker* Wu-Siefa Gym Retail 1,755 12/2021 0 $1,400 $0.80




$5,430$65,160


-$35,992


$29,167 NOI

÷7%

Cap Rate=

$416,671 Value

*Total current rent is $4,000. Rent will increase to $4,120 in 2020 and to $4,500 in 2021


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Rent Roll - 405-407 W Gowe StreetTwo Tenant Office Building




PSF

407 W Gowe*King County

Svc GrantOffice 2,754 08/31/2021 0 $4,487 $1.53

407 W Gowe Valley Optical Office 2,655 01/03/2022 0 $4,982 $1.86


$9,469$113,628


-$27,040


$86,588 NOI

÷7%

Cap Rate=

$1,263,971 Value

*$615 NNN included



Apartments Rent Roll - 328 (½) Meeker

Rent: $58,140

Expenses: ($11,726)

Apartment NOI: $46,414

Unit Tenant Size Rent Rent PSF Proforma RentProforma Rent PSF

Current Reimbursements

Proforma Reimbursements

Type

1 Vacant 330 SF$990+40

$3.00 $990 $3.00 0 45 Studio

2 Mauricio 896 SF $1,290 $1.44 $1,971 $2.20 40 45 1 bed

3 Pietzke 532 SF$1,050

+40 water$2.04 $1,325 $2.40 40 45 1 bed

4 Mendez 332 SF$975+40

$3.05 $975 $3.05 40 45 1 bed

5 Pockard 260 SF$400

+20 water$1.53 $793 $3.05 40 45 Studio

Totals 2,350 SFSeller will

guarantee $4,845 in rental income

$6,054/mo($72,648/yr)

160$225/mo

($2,700/yr)


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Average Apartment Rent Comparison Data98032 Rent Trends

Rents are Expected to Rise 5% in 2018

All Rental Studio 1 Bed 2 Bed

June 2018 $1,456 $1,008 $1,307 $1,519

Sept 2017 $1,418 $970 $1,249 $1,494

May 2017 $1,445 $1,021 $1,265 $1,514

Jan 2017 $1,360 $951 $1,181 $1,431

Sept 2016 $1,327 $899 $1,171 $1,394

May 2016 $1,328 $890 $1,149 $1,402

Jan 2016 $1,252 $877 $1,113 $1,305

Sept 2015 $1,225 $896 $1,075 $1,287

May 2015 $1,182 $783 $1,023 $1,244

Jan 2015 $1,085 $734 $940 $1,140

Average Rent in 98032• All Rentals: $1,456

• Studio: $1,008

• 1 Bedroom: $1,307

• 2 Bedroom: $1,519

Average Rent in All Kent• Studio: $1,006

• 1 Bedroom: $1,260

• 2 Bedroom: $1,485

98032 Apartment Rent Ranges• $701 - $1,0005%

• $1,001 - $1,50051%

• $1,501 - $2,00043%



Neighborhood Rent ComparisonName

Distance From Porter

1 Bed 2 Bed Studio Unit Range Comments

Waterford23605 62nd Ave S

$1.96 PSF - $2.35 PSF $1,377 - $2208Price per square foot assumes 700SF

1 bedroom size

Signature Point25102 62nd Ave S

Kent, Wa

550-700 SF$2.42 PSF

850 SF940 SF

$1.80 PSFNA $1,299 - $1,989

No studios available 378 SF + $3.43 PSF

3 bedroom - 1,300 SF + $1.53 PSF

Arbor Chase 1615 W Smith Street

None989 SF

$1.20 - $1.83NA $1,193 - $2,310

No studios, no 1 bedrooms 2 + 3 bedrooms only (rough place)

Dwell**443 Ramsay

1/8 mile

647 SF725 SF

843 - 851 SF$2.19 - $2.66

NA $1,334 - $3,205Studio price unavailable due to wait-

ing list

Chandler Bay1020 Central Ave N

600 SF $2.20 - $3.27

1043 SF$1.67 - $2.24

NA $1,317 - $2,741

Atrum Older Units6248 S 242nd Point Kent,

Wa

611 SF$1.54 - $1.24

$1,250 - $2,988 Very dumpy units, poor tenants

Atrum Rewooded Units611 SF

$2.04 - $3.06Waiting list, no price $865 - $1,325 Remodeled upgraded units

Platform420 W Smith

200 Feet $2.99 - $4.03 NA $1,9 - $2,086Studios - 425 SF

1 bedroom - 730 SF2 bedrooms - 973 - 1,010 SF


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Value & Opportunity04

Development PotentialThe property owner hired noted architectural firm Freiheit Ho to design a mixed-use development featuring two

development options zoned DCE - Downtown Commercial Enterprise:

OPTION A78 Residential Units8,650 SF of Retail109 Parking Stalls (28 required)

OPTION B75 Residential Units17,050 SF of Retail105 Parking Stalls (75 required)


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04 Site Studies

1st & 2nd Floor Plans - Option A


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3rd, 4th, 5th & 6th Floor Plans - Option A


04 Site Studies

1st & 2nd Floor Plans - Option B


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3rd, 4th, 5th & 6th Floor Plans - Option B

The information supplied herein is from sources we deem reliable. It is provided without any representation, warranty or guarantee, expressed or implied, as to its accuracy. Prospective Buyer or Tenant should conduct an independent investigation and verification of all matters deemed to be material, including, but not limited to, statements of income and expenses. CONSULT YOUR ATTORNEY, ACCOUNTANT OR OTHER PROFESSIONAL ADVISOR. 2017/OM/303-307 W Meeker

05

Confidential Memorandum & DisclaimerNAI Puget Sound Properties (“Agent”) has been engaged as the exclusive agent for the sale of 303-307 West Meeker

Street in Kent, Washington (the “Property”), by the owner of the Property (“Seller”).

The Property is being offered for sale in an “as-is”, “where-is” condition and Seller and Agent make no representations or

warranties as to the accuracy of the information contained in this Offering Memorandum. The enclosed materials include

highly confidential information and are being furnished solely for the purpose of review by prospective purchasers of the

interest described herein. Neither the enclosed materials nor any information contained herein is to be used for any other

purpose or made available to any other person without the express written consent of the Seller. Each recipient, as a

perquisite to receiving the enclosed, should be registered with NAI Puget Sound Properties as a “Registered Potential

Investor” or as “Buyer’s Agent” for an identified “Registered Potential Investor.” The use of this Offering Memorandum

and the information provided herein is subject to the terms, provisions and limitations of the confidentiality agreement

furnished by Agent prior to delivery of this Offering Memorandum.

The enclosed materials are being provided solely to facilitate the prospective investor’s own due diligence for which it

shall be fully and solely responsible. The material contained herein is based on information and sources deemed to be

reliable, but no representation or warranty, express or implied, is being made by Agent or Seller or any of their respective

representatives, affiliates, officers, employees, shareholders, partners and directors as the accuracy or completeness

of the information contained herein. Neither the Agent or the Seller shall have liability whatsoever for the accuracy or

completeness of the information contained herein or any other written or oral communication or information transmitted

or made available or any action taken or decision made by the recipient with respect to the Property. Interested parties

are to make their own investigations, projections and conclusions without reliance upon the material contained herein.


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Seller reserves the right, at its sole and absolute discretion, to withdraw the Property from being marketed for sale at

any time and for any reason. Seller and Agent each expressly reserves the right, at their sole and absolute discretion,

to reject any and all expressions of interest or offerers guarding the Property and/or terminate discussions with any

entity at any time, with or without notice. This offering is made subject to omissions, correction or errors, change of

price or other terms, prior sale or withdrawal from the market without notice. Agent is not authorized to make any

representations or agreements on behalf or Seller.

Seller shall have no legal commitment or obligation to any interested party reviewing the enclosed materials, performing

additional investigation and/or making an offer to purchase the Property unless and until a binding written agreement

for the purchase of the Property has been fully executed, delivered and approved by Seller and any conditions to

Seller’s obligations thereunder have been satisfied or waived.

By taking possession of and reviewing the information contained herein, the recipient agrees that (a) the enclosed

materials and their contents are of a highly confidential nature and will be held and treated in the strictest confidence

and shall be returned to Agent or Seller promptly upon request; and (b) the recipient shall not contact employees or

tenants of the Property directly or indirectly regarding any aspect of the enclosed materials or the Property without the

prior written approval of the Seller or Agent; and (c) no portion of the enclosed materials may be copied or otherwise

reproduced without the prior written authorization of Seller or Agent or as otherwise provided in the Confidentiality and/

or Registration Agreement executed and delivered by the recipient(s) to NAI Puget Sound Properties.


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600 108th Avenue NE Suite 340Bellevue, Washington USA 98004+1 425 586 5600

1700 Seventh Avenue Suite 2050Seattle, Washington USA 98101+1 206 332 1466

1201 Pacific Avenue Suite 2050Tacoma, Washington USA 98402+1 253 383 3100

nai-psp.com

Documents

Offering Memorandum 326 & 402 W Meeker & 405 Gowe Street · 2019. 2. 5. · Kurt Sorensen +1 206 332 1490. [email protected] Exclusively . marketed by: Offering Memorandum. 326