The firm is expanding from a 12,000-sf building it owns and for which a sale is now pending, according to Unico regional vice president Larry Klatt, who spoke to GlobeSt.com Friday afternoon. The new commitment represents one of the city's largest lease deals this year, says Klatt, who declined to reveal the deal's average lease rate.
Annual full-service asking rates in the 294,000-sf building range from $19-$23 per sf. Given market conditions, starting net effective rents could be lower than that. If the average full-service rate over the life of the lease was negotiated to $21 per sf, then the deal would be worth right around $5 million, not accounting for owner concessions, which can typically include a couple of months free rent (in trade for a higher face rate) and a tenant improvement allowance of $20 per sf or more.
The lease brings the 31-year-old Wells Fargo Plaza--one of three class A office buildings Downtown--to just 5% vacancy. The two other class A office buildings Downtown are the Columbia Bank Building, which was completed in 2001 and is 100% occupied, and the 200,000-sf Tacoma Financial Center, which was built in 1983 and is 30% vacant. Tacoma's overall CBD vacancy for all classes stands at about 15%.
Tacoma Financial Center's vacancy comes from Weyerhaeuser Corp., whose master lease of the building from owner Finova Capital ran out in December, leaving several floors available. Finova is reportedly preparing to market the building for sale. Unico managed from 1998 through 2001 under a contract that included a purchase option and a pre-determiend price range. It passed. "We fully intended to buy it," Unico's SVP of management and leasing Jeff Shipley told GlobeSt.com in April. "But the number on option was prohibitive at the time and unfortunately we had to pass." Klatt tells GlobeSt.com a new range might renew Unico's interest.
Unico has been successful in keeping its circa 1971 high rise leased up because "we are proactive in starting conversations with our existing and potential customers and we are competitive economically," says Klatt. Since January of this year, Unico has completed about 90,000 sf of new and renewal lease activity.
Bratrud Middleton was represented by Bill Frame of Insignia Kidder Mathews, which is also a tenant of the building. Unico, an owner of more than six million sf of office properties, was represented in-house by Mike Benoit.
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