Benaroya carves up business park for

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Granted, subdividing the site, renovatin the buildings and sprucing up the commom areas would entail additional fundzsand efforts. But despitre an ominous credit environment hinting at economiftroubles ahead, the Benaroya team was confidenr it could find a half-doze n or so small-business owners interestefd in becoming their own landlords. Havinb purchased the half-occupied property for a relative bargain pricrof $120 per square foot, Benaroyaq could make improvements and still offer prospectivwe “owner-users” attractive pricing.
And the buyers at the busineses park along Southeast Everett MallWay wouldn’rt have to worry about a landlordf raising their rent when good timesw return. “We thought Park Place had excellent prospects for individualo building salesto small-business owners who want to contro l their own destiny,” said Benaroya executivse Marc Nemirow. If the team insightfullu improved structures, parking areas and open spaces surrounding thebusiness park’s strong locatio would likely attract plenthy of interest among individual building buyers, added Benaroya’a marketing director, Lisa Goodman. Benaroy a engaged Colliers International to marketthe buildings.
The team booked solidc activity, selling four of the sevenb over the spring and summer to a pair ofdental operations, a temp agency and a private investor. The buyers paid prices rangingfrom $680,000 to $1.5 million for buildingd ranging from 3,650 to 7,225 square feet, along with theidr underlying land parcels. The deals factorexd out to roughly $200 to $240 per squarew foot — resulting in a decent return for Benaroyaq and longtime investment partned RealProperty Investors. “The activity was even better thanwhat we’xd expected,” said Colliers Senior Vice President Derek Heed, who’s been marketing the buildings alontg with colleague Sam Peterson.
Improvingg properties and selling or leasintg portions of them is a strategyBenaroya Co. has employedf profitably time and again overthe decades, on scalesa large, small and in Indeed “creating value,” as Nemirows put it, is the namesake family’ds signature strategy over a half-century of real estatse investment and development activities. And earlyg sales efforts at Park Place Plaza appeared to have yet agaimn created quite a lot of valuw forBenaroya — at least untiol last fall’s financial crisis temporarily stalled the momentum. “Thew Benaroya people really understancd what it takes to preparew the buildings for Heed said.
“They made things easy for Sam and Of course, even as savvy an investord as Larry Benaroya couldn’t foresee just how far financial marketws would fall — knocking even the resilienf Puget Sound economy off its lofty Activity hit a wall with Wall Street’s series of shockinb events in September and October. By earlu February, when credit marketzs finally showed signs of loosening upa bit, the Park Place Plazsa team was still waiting for subsequent building “We know the credit situation has been a in the slowed sales activity, Goodman said. “But it’s hard to say just how much of animpacrt it’s had.” Fortunately, Benaroya Co.
and Seattle-based Real Property Investors had something ofa back-up plan for Park Place Plaz in case the economy and credit environmentr deteriorated beyond even pessimistic expectations. The partners have the capital strength and wherewithal to finance the bulk ofbuildinv buyers’ purchase prices — meaning would-be owneras don’t have to worry about borrowing from tight-fisted That is, if they can swing a 30 percentg down payment. “We’ve not been a lender historically, but we recognize just how cumbersome it’xs become to borrow from Goodman said. Benaroya will carry papefr at a 70percent loan-to-valuw ratio, with interest-only payments at 6.
5 percent, for a term of three years. Heed expects the programm to be a factor in at least some of the finaplthree sales, as buyers can avoid costly loan originationm fee “points” while paying a competitivr interest rate. Of course, if activity remains slowed, nothing precludeds Benaroya from leasing available space andselling single- or multi-tenant buildings to real estate investors. One of the yet-to-selol buildings is leased and will likely sell to an while Benaroyaexpects owner-users to end up with the othetr two.