On March 1st Miller will deliver a 28,000-sf class A office building at 23321 East Knox in the Liberty Lake area of Spokane—about 15 miles east of downtown and almost to the Idaho border. Does WAM have any tenants signed yet? "No," Miller answers simply. Is he concerned? The answer again is "no."
"We've done a lot of spec buildings in Spokane over the years and consider ourselves fortunate if we have one tenant before completion," Miller offers, adding, "So, we pick our lenders carefully. Building in this market—you have to have the right lender."
Miller tells GlobeSt.com the financing of this particular project "has built-in a large interest reserve." While he did not name the lender, with the cushion it provided he says, "We can take approximately three to four years for lease-up after it's built. However, no building of ours has ever taken that long to lease--so we're going to be fine."
There is not much Class A product here, says Miller of the Liberty Lake area—noted for its research-and-development and high-tech industrial space. That sector of product Miller says he would not consider for spec development in the current environment.
While he couldn't cite specific numbers, Miller says most current vacancies in Liberty Lake tend to be of the industrial variety. "There are some office vacancies here," he quips with nonchalance about adding more space to the pot. "But we want to be in the market and ready to lease when the economy changes," he explains, adding that the he expects the shift to occur by early or mid-2003 and include e-commerce and high-tech industry. "Then, the buildings that have vacancies now will be able to capitalize on the turn around."
WAM has engaged Max McNett of Spokane's Tomlinson & Black to secure tenants for the up-and-coming building. Asking rates are $20.50 full-service gross and come with a $15 tenant-improvement allowance and a 12% load factor.
The developer says the value of WAM's Liberty Lake project will pencil out at $3.8 million. Ron Mackie of Architectural Ventures designed the structure, and Panco Construction was the general contractor. Both are Spokane-based companies.
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