This offering presents a unique opportunity for a developer to build into South King County’s surging growth.
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.
515 Industry Drive, Tukwila, WA
Industry Drive bounds the site to the north and east / Andover Park E bounds the site to the west
King County Tax Parcel Numbers
TUC-TOD (Tukwila Urban Center – Transportation Oriented Development)
City of Tukwila
Approximately 448 feet on Industry Drive / Approximately 400 feet on Andover Park E
Tukwila Urban Center (TUC)
Transit Oriented District (TOD)
Lodging, multifamily, townhouses, mixed use, senior citizen housing, most retail uses, office, civic and institutional, parking, public transit facilities and stations
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)
Front 15’ / Sides and rear 10’
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
|Amenity & Back of House Space||6,000 SF|
|Hotel Rooms||218 - 220|
|Average Size||±420 SF|
|Parking||266 surface parking stalls|
|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|
|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|
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.
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.
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.
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.
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:
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