482,000 SF Renton Industrial Development and Sale for Puget Western
Puget Western, Inc. · Renton, WA
Represented by Mike Hemphill, The Andover Company
- SiteAbout 34 acres
- Building482,000 SF, 30' clear, dock-high loading on two sides
- Pre-lease282,000 SF to K&L Distributors, 15 years, $20 million
- Sale$22 million to G.E. Capital Investment Advisors
Challenge
Puget Western, Inc., a subsidiary of Puget Sound Energy, owned about 34 acres in Renton and was deciding whether to sell the land or develop high-tech buildings on it.
Office vacancy stood at 25% and industrial vacancy at 9%. The original plan, splitting the site into small parcels for high-tech and office users, was not working, and those users had not responded to a national brokerage firm's marketing. Puget Western could have sold the land at a discount, but it wanted a better profit.
Strategy
Andover built a new development plan around the market's need for large industrial space: a 482,000 SF building with 30' clear height and dock-high loading on two sides. Most people, Puget Western included at first, thought a building that size was too big to lease in the Kent Valley.
Andover also recommended challenging the wetland delineation, which showed two small wetland areas in the middle of the site, and marketing the project hard to large corporate users with the goal of pre-leasing a large share before construction started.
Results
A team of expert consultants showed that the supposed wetlands were not wetlands at all, and every governmental agency approved the development plan.
Andover pre-leased 282,000 SF to K&L Distributors on a 15-year lease worth $20 million, then arranged the sale of the project to G.E. Capital Investment Advisors for $22 million. Puget Western beat its profit goal, and the building reached 100% occupancy quickly.
Related services
More on the Renton industrial and office market.
Adapted from The Andover Company's published case study. Represented by Mike Hemphill of The Andover Company. Ben Hemphill now works alongside Mike Hemphill.
