$77.5 Million Non-Performing Office Loan
US - Washington, DC
HK$608,364,000 | 306,859 sf
Jones Lang LaSalle Americas, Inc. (“JLL”) is pleased to offer Redstone 2 for acquisition (the “Property”), a 119,706 square foot (“SF”) Class A, Medical and Office building located just 13 miles north of Seattle in Mountlake Terrace, WA. Redstone 2 is currently 89% leased and has steady anchor tenants in Regus (12% of RSF) and 1st Security Bank of Washington (18% of RSF). The Property benefits from three levels of executive and patient parking and is centrally located in the Northend submarket, directly off the I-5 Highway (one of Seattle’s key arterials) and within 1.5 miles of the city’s newest Link Light Rail stations, set to deliver in Q4 2024. Redstone 2 has proved to be a destination for medical users with approximately 24% of the in-place tenancy accounted for by healthcare-related tenants. Recently, the Property has experienced significant healthcare leasing activity with nearly 20,000 SF of medical-related leases signed in last 12 months alone, consisting of both new leases and extensions of existing healthcare-related tenants. Regus has also seen consistent demand from medical users for this location, and as a result has several healthcare-related tenants as clients at Redstone 2. Furthermore, the Property sits 1 mile from the Swedish Edmonds Medical Campus, a 560,000 SF facility that offers the full scope of medical and surgical services and boasts a 1,400 person staff with 450 affiliated physicians. Swedish Edmonds established itself in 2010 as the premier full-service medical campus in the Northend and continues to bolster the medical office tenancy in the submarket.
At Redstone 2, new ownership would be able to enact a medical conversion business plan that would bring the Property’s minimum healthcare-related tenancy to 69% as soon as 2028. This plan would consist of maintaining the Property’s medical-related tenancy, leasing the existing vacancy to healthcare users, and strategically converting traditional office spaces with near term rollover in the next 5 years. Medical office rents are generating an approximate 21% premium to the Property’s current office market rents, providing the next owner considerable upside on their investment. The Property also offers a one-of-a-kind ability to dedicate underground patient parking for all healthcare-related tenants, providing the unique opportunity to rapidly increase the Property’s revenue.