BearRock Investments LLC
SODO Retail Center
2406-2420 1st Avenue S., Seattle, Washington
3.5 Year Hold | 4.1% IRR
Active
Purchased the 27,000 square foot building with approximately 9,000 square feet vacant. After acqusition, we signed a lease with new tenant bringing the building 100% occupied, and renewed existing tenants at higher rents.
Project Type | Source | Size | Acquisition Price | Sale Price |
|---|---|---|---|---|
Retail/Office/Flex | Industry relationships, not on the market | 27,000 square feet | $6,200,000 | 3.5 year hold | 4.1% IRR |
We acquired the property off-market during the height of the COVID-19 pandemic. Located directly across 1st Avenue from Starbucks’ 1.2 million-square-foot global headquarters campus (home to approximately 4,000 employees), our investment thesis was straightforward: achieve 100% occupancy, carry the asset through the pandemic, and capitalize on the anticipated return-to-office momentum from Starbucks employees to sell at an optimal time.
We successfully executed the leasing plan and brought the building to 100% occupancy. However, Starbucks ultimately adopted a more flexible return-to-office policy than originally expected, and the broader SoDo submarket in Seattle has not yet returned to pre-pandemic valuation levels.
Despite these headwinds, we sold the property for $8,400,000. The asset generated steady income throughout the hold period and delivered positive distributions to investors upon sale, resulting in an overall profitable outcome.
