The purchase price for the three class A distribution centers was $17.4 million, according to county property records. The recorded price does not include sale taxes, broker commissions or the penalty to pre-pay the loan on one of the properties. Andrew Harnish and Chris Spofford with Jones Lang LaSalle represented First Industrial in the transaction.
While the parties involved declined to reveal the cap rate on the deal, recent similar deals have traded in the mid-6% range, local industry experts tell GlobeSt.com. If that was the case for this deal, then the acquired portfolio's NOI would be approximately $1.1 million. That works out to an average rent of around $0.40 per sf, which is just a couple of pennies shy of the current market rent, according to industry experts.
Gary Danklefsen, regional director for First Industrial's Seattle-Tacoma says the acquisition complements the company's 328,500-sf, two-building "green" development at the First Park Meridian Campus in Lacey, WA, near Olympia. First Industrial owns an additional 256 acres of developable land in the Seattle-Tacoma market that could support 3.8 million sf of development.
"First Industrial was a great buyer for these sorts of assets due to their creative approach and strong ability to close," Harnish said. "They were able to overcome every obstacle in the transaction."First Industrial has been looking to gain a presence in the Kent Valley market for some time. As part of the deal, it assumed the loans tied to two of the three properties. A loan on the third property was paid off despite a prepayment penalty after the lender tried to change the terms of the deal with regard to any potential environmental liabilities.
The property addresses are 19014 64th Avenue S., 18640 68th Avenue S., and 1901 Raymond Avenue SW in Renton, WA. An Internet search of the addresses turns up the names of several of the tenants, including the Beaulieu Group, an carpet and flooring company; Pacific Carpet Distributors; A&M Precision Measurement; Partners West Book Distribution; Gex Pro; and Washington Shoe Co.
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