GVA Kidder Mathews broker Andrew Miller negotiated the lease on behalf of Universal Avionics. Mastro represented itself in the transaction. The lease was signed last week.
Tuscon, AZ-based Universal Avionics houses its research, development and engineering division in the building, which is located at 11351 Willows Rd. NE, adjacent to the Willows Run Golf Course. The company has leased back the building for one year while it decides whether to remain in town or move the outpost back to company headquarters.
To capitalize the investment in 10 years, Mastro would need to sustain the building's fully-leased status and average a triple-net lease rate of about $0.94 per sf per month. Current market rates for comparable buildings are about $1.00 to $1.15, according to local brokers.
The building hit the market nine months ago at $8.5 million. A few years ago, the building was appraised at $10.4 million.
"The market is very soft in Redmond, with vacancy at approximately 25%," says Miller. "Unfortunately for the seller that is driving values down."
The Universal Avionics Building is the second building purchase in recent weeks for Mastro. In August, Mastro submitted the winning bid in the trustee sale of the 63,012-sf former Wade Cook/Stock Market Building on Interurban Avenue South in Seattle. Mastro paid $5.1 million ($81 per sf) for the vacant three-story building built in 1987 and renovated in 1997. The building's 2003 assessed valuation is $4.8 million. In 1999, the property was appraised at $7.8 million.
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