WSPE Seminar May 15 2009 Puget Sound Market

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WSPE Seminar May 15 2009 Puget Sound Market

  1. 1. Puget Sound Office Market www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000
  2. 2. About Pacific Real Estate Partners, Inc. • Founded in 1993 by four veteran real estate professionals, PREP has offices in Bellevue, Seattle and Portland • The organization is currently staffed with a team of 50 professionals who handle the leasing and sales of office, industrial and retail properties • 2006-2008 Sales: $2.1 Billion • 2006-2008 Leasing: 15.7 Million SF www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000
  3. 3. Track Record: Seattle’s Leading Investment and Leasing Team • Most active Seattle-based Investment Sales Team • 2006-2009 YTD 43 Seattle Transactions = $2.1 Billion – Seattle transactions over $50 Million 8 transactions = $805 Million – Every deal fosters stronger investor relationships and capital structure knowledge – Large land sale experience • Trips: visit 12 domestic and 3-5 international markets annually – 85 most active buyers nationally • Events – PREP hosts region’s prominent annual Investment Dinner – ONCOR Team International / Domestic investor events • International / Domestic Capital Market Reach – International ONCOR Team Benefit: Knowledge of – Exposure to over 10,000 Investment Candidates – Unparalleled local Operator/ User relationships buyer assumptions / issues www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000 3
  4. 4. Market Statistics – YTD 2009, Class A, B & C Avg. Rental YTD Total SF Vacancy Rate Absorption Seattle CBD 65,710,036 $30.99 9.5% (556,812) Eastside 42,928,749 $31.88 10.2% (50,269) Northend 18,411,983 $23.73 12.2% 80,719 Southend 17,331,189 $21.45 13.0% 26,600 Tacoma 16,396,683 $21.45 10.5% 135,329 Puget Sound 160,778,640 $27.97 10.5% (355, 101) TOTAL Source: CoStar 2009 www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000
  5. 5. Lease Comparables - Seattle Office 4Q08 1Q09 Seattle CBD Comparable Letter of Intent Rent $33.00/FS $31.00/FS Term 7 years 7 years TI’s $50.00/SF $70.00/SF -19% Effective Free Rent 3-4 months 4-9 months Change Annual Increases 3% annual $1.00 annual Moving Allowance $0.00 $1.50-$3.00 Size 7,000 SF 7,000 SF Industry All All www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000
  6. 6. Lease Comparables - Bellevue Office 4Q08 1Q09 Bellevue CBD Comparable Letter of Intent Rent $33.00/NNN $26.00/NNN Term 60 months 60 months Turnkey -22% TI’s $25.00/SF ($28.00/SF) Effective Change Free Rent None 5 months free Annual Increases 3% 3% Moving Allowance N/A N/A Size 5,000 SF 16,000 SF Industry Marketing Firm Technology Firm www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000
  7. 7. Market Drivers - Seattle SF Occupied Growth 1.6 Million 900,000 1.5 Million 600,000 1.7 Million www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 Real Estate Services Presentation PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000 7
  8. 8. Market Drivers – Eastside SF Occupied Growth 14 Million 1 Million 400,000 500,000 1.1 Million www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 Real Estate Services Presentation PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000 8
  9. 9. Market Drivers – Other SF Occupied Growth 14.8 Million* 200,000 1.2 Million 400,000 *Includes production facilities www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 Real Estate Services Presentation PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000 9
  10. 10. Tenants in the Market – 100,000 SF + SF Tenant Timing Current Location Current SF Requirement 2012 / Frank Russell 350,000 Tacoma 400,000 2013 Washington Mutual Perkins Coie 260,000 3/2011 300,000 Tower EPA 175,000 7/2009 Park Place Building 175,000 Dendreon 150,000 7/2011 3005 First Avenue 125,000 www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 Real Estate Services Presentation PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000 1 0
  11. 11. Future Outlook 2009 – 2011 New Construction Projects Seattle Market Total Projects Total SF Pre-Leased 2009 Delivery 7 2,238,073 26,000 (5%) 2010 Delivery 1* 774,849 774,849 (100%) 2011 Delivery 1* 569,000 569,000 (100%) TOTAL 9 3,581,922 1,369,849 (38%) *Amazon space www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 Real Estate Services Presentation PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000 1 1
  12. 12. Investment Market – Office Sales over $20MM 2004 2005 2006 2007 2008 Number of 30 43 54 131 7 Sales Price / SF $411 $459 $575 $531 $342 (Highest) Cap Rate 8.08% 6.72% 6.32% 5.17% 6.17% Average www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000
  13. 13. Current Sales Activity Building Asking Price Cap Owner Size Comments Market $/SF Rate First & Stewart $21,000,000 Offers on in-place income @ 83% BlackRock 90,700 8.3% occupancy Seattle $232/SF Seattle PI $14,200,000 Five bids: $75-$150/SF. Legacy 100,000 10.5% Seattle $142/SF 65% near-term vacancy Seattle Tower $22,084,790 Cap on in-place income with 23% 8.7% - Legacy 169,883 vac. Cap on pro-forma with 10% Seattle $130/SF 10.4% vac. Local interest only Washington Mutual Potential 250,000 leaseback Center JP Morgan 1,000,000 N/A includes 250,000 SAM condos Seattle interest. www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000
  14. 14. Current Sales Activity Cont. Building Asking Price Cap Owner Size Comments Market $/SF Rate Lincoln Plaza $29,600,000 Suburban Principal 148,000 8.75% $200/SF Bellevue Northcreek Place $17,000,000 NOI; $1,550,000. 100% leased. 6 Schnitzer 98,831 8.95% tenants, 85% of rollover is after 2013. Bothell $181/SF Canyon Park 87% leased. Major tenants are $23,000,000 Molina/Virgina Mason. True Class A. Heights BlackRock 144,400 8.6% $159/SF Offers on in-place income @ 72% Bothell occupancy Landmark East & 98.2% leased, 10% cap or $125/SF. Cap $34,237,500 West BlackRock 273,900 10.0% rate on in-place income; term options $125/SF 2010 Renton www.pacific-re.com | realestate@pacific-re.com BELLEVUE: 225 108th Avenue NE, Suite 550, Bellevue, WA 98004 | (425) 974-4000 PORTLAND: 1 SW Columbia Street, Suite 850, Portland, OR 97258 | (503) 972-8000 SEATTLE: 1700 7th Avenue, Suite 2050, Seattle, WA 98101 | (206) 971-7000

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