Steve Ruggiero, president of Gig Harbor-based First American Properties, is marketing the property Cahan, whom Ruggiero describes as a "standard merchant builder." Cahan's developments are scattered throughout Washington, California and Nevada, says Ruggiero. The majority of them he sells, keeping only a very small portfolio for himself.
Office Max is one of 15 retail chains for which Ruggiero handles Washington real estate. In the mid-90's Office Max had decided it wanted to build a store here. The 4.32-acre surplus parcel it purchased from Fred Meyer was too large for just a single-tenant, however. Auburn Center is the result.
The center lies in the midst of what Ruggiero describes as this city's "focal point for shopping." The tenants flanking Office Max include Hardy Universe, University of Washington Physicians and Regis Corp. hair salon. Rates on those leases range from $16.25 to $19.50/sf NNN. The exception, Ruggiero tells GlobeSt, is the Office Max lease, which is "absolute net." At the moment, there is one vacancy of 1,680 sf, for which the center is asking $19.50/sf NNN.
Net operating income is listed at $612,923, with operating expenses of $19,354. According to the Ruggiero, the sales price converts to a "pro forma" cap rate of 8.9%.
Other major stores in the immediate vicinity of the Auburn Center are a new Lowe's to the west, and the Fred Meyer. Ruggiero says about two years ago the REIT, Pan Pacific, purchased a nearby Office Depot-anchored center, which has since been partially redeveloped with a relocated and expanded Albertson's grocery. Specifics on that property were not immediately available.
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