Industrial landlord Terreno has added to its Seattle-area portfolio by acquiring an old industrial property in Sodo.
The San Francisco-based company on Wednesday paid $34 million for the nearly 8.5-acre property at 4786 First Ave. S., public records show.
Due to its proximity to densely populated downtown and surrounding neighborhoods, owners and operators of warehouses and distribution centers have been leasing up space in Sodo. This puts them closer to e-commerce customers.
Only 1.5 percent of the city of Seattle's industrial space, most of which is in Sodo, was vacant at the end of last year, according to NAI Puget Sound Properties. The annual rental rate for warehouses was $12.37 per square foot versus $5 per foot in the Kent Valley.
Terreno bought the 235,000-square-foot distribution building from Wendy Ellen Gruenberg, Edwin Lee Solot Jr., Claire Solot, Nancy E. Marx, and three members of the Better family: Sarah L., Charles E. and David W, according to the sales deed.
In a news release, Terreno said it will renovate the property that today is 65 percent leased to three companies, including long-time tenant Sears. Sears plans to move its parts and service center to another South Seattle location, said Thad Mallory, a broker with Kidder Mathews who worked on the sale.
Mallory and Kidder colleagues Evan Lugar, Tony Miltenberger and Matt Wood represented Terreno.
Terreno estimated that when the property is renovated and leased up, it will generate an internal rate of return of just over 5 percent.
Terreno buys and operates industrial real estate is Seattle and five other coastal markets. The company's website states it owns two dozen buildings totaling more than 1.6 million square feet in the Puget Sound region. The properties, which are between Sodo and Kent in the Puget Sound region, are more than 99 percent occupied.
For the full story, go to the Puget Sound Business Journal.
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