Overview

The Offering

Kidder Mathews is pleased to present the Southcenter Development Opportunity. Surrounded by the Puget Sound’s largest shopping area, the Westfield Southcenter mall with 1.7 million square feet of leasable retail space and 230 stores, this offering presents a unique opportunity for a developer to build into South King County’s surging growth.

The Puget Sound is currently experiencing unprecedented growth with over 50,000 jobs added to the area over the past 12 months. Employment in the Puget Sound region grew by 3.7 percent last year and is expected to grow by another 2.1 percent in 2017. Meanwhile, the unemployment rate in the Puget Sound region sits at 3.7 percent – a full percentage point below the national average.

The housing and hospitality markets exemplify this growth. Hotel occupancy rates in King County remained strong through 2016 while room prices and average daily room rates have continued to increase. The housing rental market has also witnessed unparalleled growth with rents steadily increasing near 6 percent to 8 percent per year for the last six years. This is largely due to the growth of corporate giants, including Amazon, Boeing, Microsoft, Expedia, Nordstrom, Starbucks, and Weyerhaeuser, to name a few, as well as many other Fortune 100 employers move into the area including Facebook, Google, and Apple.

This property offers 3.45 acres of flat, readily developable land within blocks of the Southcenter Mall as well as the Interstate 405 and I-5 intersection. Zoning allows a broad range of uses with an ability to go as high as 115 feet. This site can mass at minimum 220 rooms or units and potentially significantly higher with bonus incentives. The Southcenter Development Opportunity presents an incredible opportunity for a developer to take advantage of the surging growth throughout the area while capitalizing on an extremely high demand market.

Offering Price
$6,700,000


Property Overview

Address
515 Industry Drive, Tukwila, WA

Cross Streets
Industry Drive bounds the site to the north and east / Andover Park E bounds the site to the west

King County Tax Parcel Numbers
022340-0070

Land Area
150,044 SF

Zoning
TUC-TOD (Tukwila Urban Center – Transportation Oriented Development)

Locality
City of Tukwila

Frontage
Approximately 448 feet on Industry Drive / Approximately 400 feet on Andover Park E


Property Details

Highlights

  • Proximity to Southcenter Mall
    Southcenter Mall is the largest in the Puget Sound and Seattle’s destination for an abundant choice of Northwest-inspired fashion, dining, and entertainment. With over 14 million annual visitors, the surrounding area’s growth as a hospitality and residential destination has surged as numerous new developments look to capitalize on the location and visibility.
  • Development Friendly Jurisdiction
    The City of Tukwila has a developer and business friendly attitude as it continues growing into a large metropolis in South King County. The flexible underlying zone on this site, as well as the numerous incentives to increase the height of a potential structure, speaks to the willingness of the city to increase population and growth to the area. Recent nearby development agreements with the city suggest the potential to develop above 115’.
  • Easy Access to Both I-5 and I-405
    This property is within minutes to on-ramps for both I-5 - connecting the site to Seattle and Tacoma - and I-405, connecting the site to Bellevue and Kirkland. Excellent visibility from both freeways to the site provides further marketing potential.
  • Large, Readily Developable Site
    With over 3.4 acres of land, the property offers an abundance of potential in the programming of a new development. The ability to use surface parking greatly decreases construction costs, as does the flatness and solid soils at the site.
  • New, Nearby Construction Creating a Sense of Place
    Four, large nearby developments suggest the ongoing development of a critical mass to the area for both residents and hotel occupants. A significant amount of nearby employment also calls for the need of additional housing and nearby lodging.

Zoning Summary

Zone
Tukwila Urban Center (TUC)

District Standard
Transit Oriented District (TOD)

Allowed Uses
Lodging, multifamily, townhouses, mixed use, senior citizen housing, most retail uses, office, civic and institutional, parking, public transit facilities and stations

Maximum Height Without Incentives
45’

Frontal Improvement Height Incentive
70’ (115’ if combined with multifamily, LEED or Affordable Housing Incentive)

Multifamily Height Incentive
70’ (115’ if combined with frontal improvement, LEED, or Affordable Housing Incentive)

Building Setback
Front 15’ / Sides and rear 10’

Parking Requirements
1 stall / dwelling unit
1 stall / hotel room
3 stalls / 1,000 SF of office
1 stall / 100 SF of restaurant
2.5 stalls / 1,000 SF of retail sales, bulk
4 stalls / 1,000 SF of retail sales, general

Massing Study Created By
Gareth Roe, AICP
Senior Associate, Planner

Development Options

Hotel massing study at 45' without bonus height incentives
Amenity & Back of House Space 6,000 SF
Hotel Rooms 218 - 220
Average Size ±420 SF
Total Stories 4
Parking 266 surface parking stalls
Residential only massing study at 115’ with bonus height incentive and structured parking
Lobby & Amenities 2,000 SF on ground floor
Amenity Spaces 1,500 - 2,000 SF on 2nd and 3rd floors
Apartment Units 280 - 300
Average Unit Size ±750 SF
Units Per Floor ±30
Parking 548 structured parking stalls, 92 surface level stalls
Mixed residential / hotel massing study at 115’ with bonus height incentives and structured parking
Lobby & Amenities 7,280 SF on two levels
Hotel Rooms 270 rooms (30 rooms per floor)
Average Hotel Room Size ±420 SF
Residential Units 90 units (11 units per floor)
Average Residential Unit Size ±750 SF
Parking 504 structured parking stalls, 92 surface level stalls

Location

Tukwila

Tukwila has long been known as a great place for business but has recently witnessed a large push in its residential and hospitality markets. The city has over 40,000 jobs with numerous well-known companies residing in the area, including Boeing, Costco, BECU, Continental Mills, Odin Brewing Company, Pop Gourmet Foods, the Sabey Corporation, and Seattle Chocolates.

Largely known as a retail powerhouse, Tukwila’s huge draw is the Southcenter mall, which is the largest in the Pacific Northwest. Tukwila generated nearly $1.9 billion in taxable retail sales in 2014, and aside from the numerous larger employers, the city also houses hundreds of small businesses.

With 180 acres of parks in the area, the population of 20,000 in the city continues to increase while maintaining a high quality of living. Numerous new projects to the area have sought to keep up with the huge amount of demand South King County has experienced since 2012, including the 19-story Washington Place to the north of the Southcenter Offering which will entail a high-end hotel alongside 370 new apartment units, as well as several additional hotels expected to bring 200-plus new rooms near the mall.

Nearby

Link Light Rail System Map

Southcenter Mall

Westfield Southcenter is Seattle’s destination for an abundant choice of Northwest-inspired fashion, dining, and entertainment. Located at the junction of the Puget Sound’s two most heavily traveled highways (I-5 and I-405) and just minutes from SeaTac International Airport, the property is the largest shopping center in the state of Washington. The center features a premium blend of nearly 250 national and regional brands including Nordstrom, J.Crew, Lululemon, Athletica, Michael Kors, Sephora, Apple, Gene Juarez Salons & Spas, LUSH, LEGO, a 16-screen AMC Theatre with IMAX, superb full-service restaurants, and a dining terrace featuring dramatic views of Mt. Rainier.

Transportation

Traffic Count

Proximity To

Tukwila Light Rail Station

2.5 Miles

Sounder Commuter Rail

0.9 Miles

Andover Park West

0.6 Miles

Market Area

Puget Sound Overall Market

The Puget Sound is on its way to four million total residents with recent year-over-year growth of over two percent in population. This level of growth is largely due to the booming regional economy. In 2016 the Puget Sound added around 60,000 new jobs. In fact, since 2011 over 270,000 new jobs were added to the region with numerous large employers still continuing to post high paying available positions.

This large scale job growth has resulted in a steadily decreasing unemployment rate, which dropped another 17 percent in 2016 to 4.3 percent throughout the Puget Sound. The area’s significant growth levels have put its largest airport, Sea-Tac International Airport, on pace for another record year. More than 26 million passengers passed through the airport in the first seven months of 2016, 2.2 million more than the record-setting first seven months of 2015.

The region’s local housing and hospitality markets have responded in a corresponding manner to the significant job and population growth. Regional vacancy for apartments is at 3.5 percent with an insatiable demand for new product. Between 2012 and 2015, the region witnessed the delivery of 31,900 new units to the market. Currently there are over 23,000 units under construction, part of almost 70,000 planned for the area between 2016-2020. Rising regional wealth has helped support rising rents as well, with a regional growth of over 9 percent between the end of 2015 to the end of 2016.

Hotels have similarly experienced dramatic growth, with 2016 completing a fifth year of record performance. Room prices have increased rapidly with the growing demand to the area, and many experts predict continued growth in average daily room rates through the coming year.

South King County

Across property types, South King County has demonstrated some of the strongest numbers in the Pacific Northwest. The office market has seen asking rental rates increase by almost 30 percent since 2012 with several new projects under construction, including the 748,000-squarefoot Southport Office Campus in Renton, and the 300,000-square-foot building for the Federal Aviation Administration in SeaTac. Leasing activity consists of mostly smaller tenants, pointing to the steady rising confidence of small businesses.

The industrial sector in South King County is one of the strongest in the country with huge levels of net absorption since 2012 and a vacancy rate of 2.38 percent. This steady increase in demand has caused rents in the area to increase dramatically, at over 30 percent since 2012.

The significant level of growth on both the office and industrial front in the area has brought a tremendous demand for both residential and hospitality to the area. Since 2014, over 3,000 new apartment units have been delivered to the area, with another 3,400 planned for delivery by 2018. The significant local job growth has brought a huge number of new residents. Similarly, the hotel market has witnessed an explosive demand, resulting in five new projects delivering between 2016 and 2017.

Major Regional Employers

Microsoft, Boeing, and now Amazon, have historically dominated the Puget Sound’s office markets. An emerging trend in this area, however, has been the growth of startup technology and life science companies, thanks largely to a highly educated employee base.

The University of Washington, Seattle University, and young employee alumni of Microsoft and Amazon have amplified the entrepreneurial mindset in the area. Further, the world’s best capitalized non-profit, Bill and Melinda Gates Foundation, is located in Seattle with a commitment to entrepreneurialism, expanded educational opportunities, and access to information technology. Other large office tenants in the area include:


Due Diligence

Please register to go to gain access to the due diligence documents. These documents include: massing options, environmental phase I, soil study report, survey, and title information.