E. A. Morse, director of commercial sales for the Kennewick office of Coldwell Banker Commercial, has held the listing for the property for the past 14 months, but tells GlobeSt.com he expects his luck to change. Morse says a massive new project at the Hanford nuclear site is about to get underway and trigger a boon for the Tri-Cities area, which includes the cities of Kennewick, Richland and Pasco.
With an estimated cost between $10 billion and $15 billion, Hanford will soon begin construction of a waste vitrification plant to convert the site's highly-contaminated liquid nuclear waste to a more easily disposed solid material. The project, expected to last nearly seven years, will result in 3,500 jobs this year alone. Moreover, says Morse, for each new hire at Hanford, the Tri-Cities has historically added 1.25 jobs to its community in support of those working at the nuclear site.
Tri-City Professional Center is situated on 10.2 acres at 1100 and 1200 Jadwin Ave. Morse says the owners--Richland Office Building Partners, a California general partnership--see this as a good time to unload the property. The partnership is comprised of three individuals. Two are based out-of-state and the third, Jerry Abrams, doubles as the property's on-site manager. He was not immediately available for comment.
Another factor in the owners' decision to sell is the leasing history of the property. For the past 15 years or so, says Morse, primarily government contractors related to Hanford have occupied the buildings. Although the office complex has been close to full that entire time, government tenants would never sign leases for more than a year or so. In the recent past, the professional center has been able to replace government leases with private tenants signing five-year terms, making the property more marketable.
The 1200 Jadwin building was built in 1980. It has a gross building area of 126,175 sf and a net leasable area of 98,216 sf on six above-ground floors. Fluor Federal Services Inc. leases 95,165 sf at a graduated lease rate from $18.50 to $19.50 through August 2005. Two other tenants hold the remaining space of just over 3,000 sf. The second building, built in 1977, has 63,280 sf on four floors. Fluor Federal Services Inc. is also a tenant in this building, with two spaces totaling 16,853 sf. The third floor is vacant, but negotiations are underway with a prospective tenant. Rates range from $17.50 per sf to $19.50 per sf with leases through 2001 and 2003.
The structures are sited on a parcel of land, leased from the city of Richland. The 35-year term will run out in 2011, but the property has an option to extend the lease for an additional 31 years. Structured and on-site parking for the entire complex consists of 567 spaces. With the two building fully leased, as is projected, the asking price would translate to a 9.5% capitalization rate.
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