Puget Western, Inc
Puget Western, Inc. a subsidiary of Puget Sound Energy owned approximately 34 acres in Renton, WA. Puget Western was considering a disposition of the property or developing the property into high-tech buildings.
The marketplace was changing drastically with the office market becoming depressed at a 25% vacancy level and the industrial market was only in fair shape at a 9% vacancy level. Puget Western's original plan to divide the property up into small parcels and develop or sell to high tech and office users was not working well.
Puget Western could sell the land at a discounted price, however their goal was to make a better profit than this. The office and high tech users were not responding to the marketing of the property by a national brokerage firm.
By listening well and understanding the goals of Puget Western, we were able to establish criteria for a new development plan that would meet the market need for large industrial space and also meet Puget Western's profit goal. We recommended building a large 482,000 s.f., 30' clear height building that would have dock high loading on two sides. Most people (including initially Puget Western, Inc.) thought this building was too large and it would be too big to attract tenants within the Kent Valley. In addition, we recommended challenging the supposed wetland delineation that said there were two small wetland areas in the middle of the site. Our recommended marketing strategy was to market the project intensely to large corporate users and our goal was to pre-lease a substantial part of the building before construction started.
By bringing in the right team of wetland consultants, we were able to determine that the supposed wetland areas in the middle of the site were not wetlands at all! The development plan of this large 482,000 s.f. building was approved by all governmental entities. We were successful in pre-leasing 282,000 square feet of the building to K&L Distributors on a 15 year lease worth $20 million! We then marketed the project for sale and successfully sold the building to G.E. Capital Investment Advisors for $22 million. Puget Western's profit goal was surpassed and the property reached the 100% occupancy level very quickly.