Historic Brewery Gives Way to Mixed Use

SEATTLE—The Original Rainier Brewery was constructed in the early 1900s as the brewery for Seattle Brewing and Malting Company, and eventually housed Rainier Beer from its location at 5624-6004 Airport Way South, four miles south of the Seattle CBD. Today, it’s a four-building creative mixed-use campus totaling 187,466 square feet in the historic Georgetown neighborhood, Seattle’s oldest neighborhood.

A $32.5 million loan for the acquisition of the Original Rainier Brewery was recently obtained. The Holliday Fenoglio Fowler LP team worked on behalf of the borrower, ScanlanKemperBard, to secure the three-year floating-rate loan with two one-year extension options with a debt fund.

“This is the fourth acquisition for our Urban Industrial platform,” said SKB president Todd Gooding.  “We see an untapped demand for local and regional manufactures. The Original Rainier Brewery asset fits this profile.”

SKB has plans to further elevate the stature and improve the property while maintaining the historic integrity. The property is a designated landmark that encompasses four separate buildings–the Bottling Plant, the Malt House, the Warehouse and the General Office–in addition to two land parcels. The buildings, which were designed for creative industrial/light manufacturing uses, feature natural light, exposed brick, original flooring, historical detailing and unique layouts, and are 92% leased to 55 tenants including REI, Patagonia, Keen, Elysian Brewing Company, Frans Chocolate, and Kyoto Art and Antiques.

“We are grateful to the Sabey Corporation for entrusting us to leverage the good work they have already done, both at the property and in the community,” adds Brian Hughes-Cromwick, SKB’s vice president of acquisitions. “We are excited to have the opportunity to build off of that work to take the property to the next level and become a part of the dynamic Georgetown community.”

HFF’s debt placement team representing the borrower included senior managing director Tom Wilson and associate Zachary Kersten.

“HFF was pleased with the robust lender interest from regional banks, debt funds and insurance companies,” Wilson tells GlobeSt.com. “We look forward to seeing SKB improve the Original Rainier Brewery while the historic Georgetown submarket continues to takes flight.”

The final quarter of 2018 was a good one for the Puget Sound office market, which had 582,187 square feet of absorption and recorded asking rents of a new high of $36.91 per square foot, an increase of 0.5% on the third quarter and 8.7% higher than the fourth quarter of 2017, according to a report by Newmark Knight Frank. This marks the 25th consecutive quarter of positive absorption for the region.

The Bellevue CBD led all submarkets with 183,266 square feet of absorption, thanks to move-ins from Google for 77,729 square feet at 112th at 12th East and T-Mobile for 32,435 at Newport Tower. After a down year, the I-90 Corridor submarket finally rebounded with positive absorption of 86,014 square feet, due in large part to a move-in from Farmers Insurance at Sunset North for 60,166 square feet.

Absorption was not as strong across the lake in downtown Seattle, where the 321,693 square feet of absorption was roughly half the 2018 quarterly average. Bucking that trend was Madison Centre, which alone had 113,228 square feet of absorption and is well on its way to being fully leased after delivering at the beginning of this year, says the Newmark Knight Frank report.