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90,000-SF Capitol Center Changes Hands

OLYMPIA, WA-An investor group out of Seattle buys the 90,000-sf office complex here from Sato Corp. for $11.9 million. The four-building complex, which includes Downtown's tallest office building, is fully leased by the state Department of Corrections through 2007.

By Brian K. Miller | Updated on January 19, 2005

OLYMPIA, WA-Sato Corp. of Bellevue has sold the 90,000-sf Capitol Center office complex here to an investor group led by Joe Yencich and Jim Potter for $11.9 million. Yencich is vice chairman of the Seattle-based real estate services company Ewing & Clark. Potter is chairman of local multifamily housing developer Kauri Investments Ltd.Located on the block west of the Heritage Park fountain and across from Capitol Lake, Capitol Center consists of Downtown’s tallest office building–a nine story, 75,000-sf structure at 410 Fifth Ave. SW–and three one-story buildings totaling 15,000 sf. Included in the purchase is some extra land currently used as a parking lot. The entire complex is leased to the state Department of Corrections through 2007 at a rate of $118,000 per month, though Yencich tells GlobeSt.com that the department is expected to move later this year.Looking ahead to the next tenant, Yencich says he will have a conversation with the state to see if other agencies would be interested in occupying the space “if we throw some money at it.” In addition, he says there has been interest expressed by non-governmental tenants. Another possibility is that one or more of the one-story buildings could be converted to retail. “We’ve got an income stream for two years while we figure it out,” he says. “It’s one of the best locations in the market.”Yencich and Potter have jointly acquired seven other office properties in the Puget Sound. The duo’s specialty is well located value-add opportunities in the 50,000-sf to 120,000-sf range, says Yencich. Their holdings include the Columbia and the Bay Vista office buildings on Second Avenue in Downtown Seattle.

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