Offering Memorandum LAKE CITY RETAIL AND LAND OPPORTUNITY 14038-14040 Lake City Way NE Seattle, WA 98125 Exclusively offered by Paragon Real Estate Advisors 1
Offering Summary Paragon Real Estate Advisors is proud to exclusively offer the Lake City Retail & Land Opportunity, a rare chance to purchase a property the heart of fast growing Lake City. This property offers an investor immediate cash flow and upside while also a great land bank with the NC2-40 zoned 13,193 square foot lot. This outstanding location is just steps away from the many businesses, restaurants and shops on Lake City Way as well as convenient access to I-5 Downtown and South Lake Union. Name Lake City Retail and Land Opportunity Address 14038-14040 Lake City Way NE, Seattle WA 98125 Total Units 2 Built 1947 Square Feet 3,146 Total Net Rentable Price $795,000 Current GRM/CAP 16.5/4.6% (5% Vacancy) Market GRM/CAP 11.0/7.4% (5% Vacancy) Expense Per Unit $3,094/Year Terms Cash Out Lot Size 13,193 Square Feet Zoning NC3-40 LAKE CITY RETAIL AND LAND OP 2
Investment Highlights Development opportunity Lank bank - many new development projects nearby High daily traffic count Located on the bus line 15 minutes to Downtown and Southlake Union Reposition opportunity for great cash flow Rapidly growing area in the heart of Lake City Close to future light rail station on 145th Street Walking distance to many service and retail businesses NC3-40 Zoning - 40 foot height limit New apartments located across the street 3
Neighborhood Map SEATTLE CBD QUEEN ANNE PUGET SOUND UNIVERSITY OF WASHINGTON GREEN LAKE BALLARD NORTHGATE MALL LAKE CITY RETAIL AND LAND OPP JACKSON PARK GOLF COURSE 4
Neighborhood Amenities Food/Drink Shopping/Services Parks/Schools 26 1 Heaven Sent Fried Chicken 2 Briley s BBQ and Grill 3 Fred Meyer 4 Northgate Shopping Mall 5 Little Brook Park 6 Wells Fargo Bank 7 Shorecrest High School 8 Virgil Flaim Park 9 Jackson Park Golf Course 10 Elliott Bay Brewery 11 Dick s Drive-In 12 Safeway 13 Saint Matthew School 14 Tubs Gourmet Sub Sandwiches 15 Meadowbrook Playfield 16 Nathan Hale High School 17 Caroline Tavern 18 Twin Ponds Park 19 Park Shoreline 20 Target 21 Northwest Hospital Medical Center 22 Saffron Grill 23 North Seattle College 24 Starbucks 25 McDonald s 26 Hamlin Park 21 22 23 18 19 20 4 9 13 17 12 7 LAKE CITY RETAIL AND LAND OPP 8 24 14 10 6 5 11 16 2 25 1 3 15 5
Improvements The Lake City Commercial property is located at the very heart of the Lake City. This location is approximately 15 minutes to the Seattle s Central Business District and the University of Washington. Bordered by Lake Washington to the east and I-5 to the west, Lake City has been designated as an Urban Village (Hub) by the City of Seattle. This designation encourages pedestrian friendly development, community transit and an increased density for both residents and businesses. Lake City has over 500 businesses. Property owners in this area are sure to benefit from the tightening rental market, a growing number of residents moving towards neighborhoods with many retail amenities, services, and public transportation. This trend will grow as tolling occurs along Highway 520 and high rental rates push residents toward North Seattle. The Lake City Commercial property was constructed in 1947 on an NC2-40 13,193 square foot lot. This property offers an investor the potential to stabilize the investment with market rate leases or redevelop the property to take advantage of the density of NC2-40 zoning. The property is currently occupied by ACR Tire, a consignment shop and produces additional income from a billboard lease. 6
Lake City Snapshot Population 33,660 Median household income $90,935 Single Married Owner Occupied Renters Walk Score Transit Score Bike Score 57% 44% 54% 46% 77 - Very Walkable 55 - Good Transit 64 - Bikeable Median 1 Bd/1 Bth Rent $1,316 Median 2Bd/1 Bth Rent $1,656 TOP JOB SECTORS: * Management: 12.2% Business 6.2% Computer: 9.3% Engineering 6.2% Administrative: 9.7% Sales: 17.2% Service: 12.3% Healthcare: 2.7% Engineering 4.4% Science 3.6% Social Services: 1.7% *https://www.apartments.com/lake-city-seattle-wa/?bb=hspy6kyvuqpl97xkb#guide 7
Lake City Lake City is a northeastern Seattle neighborhood located between Interstate 5 and Lake Washington, and stretching from NE 85th Street to the Seattle City line at NE 145th Street. This neighborhood has been designated as an Urban Village (Hub) by the City of Seattle. This designation encourages pedestrian friendly development, community transit and an increased density for both residents and businesses. Lake City has seen many iterations of itself, going from sleepy logging and farming community known to some as Little Germany to a seedy destination for many city dwellers during the prohibition era. After World War II ended, young families flocked here and the population exploded. Lake City residents now enjoy a bustling, forward-thinking community going to great efforts to improve the quality of life in the neighborhood. Lake City has over 500 businesses. Property owners in this area are sure to benefit from the tightening rental market, a growing number of residents moving towards neighborhoods with many retail amenities, services, and public transportation In the Lake City neighborhood, 73.4% of the working population is employed in executive, management, and professional occupations. The second most important occupational group in this neighborhood is sales and service jobs, from major sales accounts, to working in fast food restaurants, with 15.4% of the residents employed. Other residents here are employed in manufacturing and laborer occupations (6.3%), and 4.9% in clerical, assistant, and tech support occupations. 8
Employment Greater Seattle excels at the industries of the future - the region is a center of innovation and features some of the world s top global brands. Our aerospace industry is one of the largest in the world, home to Boeing Commercial Airplanes and over 800 aerospace firms that employ 17% of all aerospace workers in the United States. Greater Seattle is also a leading center for information and communications technology, bolstered by industry pioneers such as Microsoft and Amazon. As a result, our region has emerged as a world leader in cloud computing and data visualization, and ranks 4th as a global startup hub ahead of New York and Boston. > > Adobe > > Alaska Airlines > > Amazon > > Apple > > AT&T Wireless > > Boeing > > Costco > > Expedia, Inc. > > Expeditors International > > F5 Networks > > Facebook > > Fred Hutchinson > > Gates Foundation > > Getty Images > > Google > > Microsoft > > Nintendo > > Nordstrom > > Paccar > > RealNetworks > > REI > > Russell Investments > > SpaceX > > Starbucks > > Symetra Financial > > Tableau Software > > T-Mobile > > Twitter > > Uber > > University of Washington > > Virginia Mason > > Weyerhaeuser > > Zillow > > Zulilly 9
Map of Key Employers ELLIOTT BAY 10
Parcel Map 11
Operating Summary Units 2 Year built 1947 Rentable Area 3,146 Sq.Ft. Down Payment $318,000 40% Loan Amount $477,000 60% Interest Rate 4.00% Amortization Lot Size/Zoning 25 Years 13,193 / NC3-40 Price $795,000 Price Per Unit $397,500 Per Building SF $252.70 Per Lot SF $60.26 Current GRM 16.47 Current CAP 4.60% Market GRM 11.00 Market CAP 7.44% Unit Size Current Rent Market Rent ACR Tire Company 2,674 $1,300 $2,000 Consignment Store 472 $1,000 $1,800 Storage Yard $1,000 $1,500 Commercial Sign 0 $223 $223 Total Monthly Income 3,146 $8.77/Gross S.F. $14.49/Gross S.F. Monthly Scheduled Rent Mod Gross $3,523 $5,523 CAM Reimbursements $500 $500 Parking Income $0 $0 Miscellaneous Income $0 $0 Total Monthly Income $4,023 $6,023 Annualized Operating Data Current Market Scheduled Gross Income $48,276 $72,276 Less Vacancy 5.0% $2,414 5.0% $3,614 Gross Operating Income $45,862 $68,662 Less Expenses $9,283 $9,534 Net Operating Income $36,579 $59,128 Annual Debt Service ($2,518) $30,213 $30,213 Cash Flow Before Tax 2.00% $6,366 9.09% $28,915 Principal Reduction $11,340 $11,340 Total Return Before Tax 5.57% $17,706 12.66% $40,255 Annualized Operating Expenses Current Market Real Estate Taxes 2017 Actual $6,749 $7,000 Insurance 2017 $814 $814 Utilities 2017 $0 $0 Management 5% $1,720 $1,720 Total Expenses $9,283 $9,534 Current Operations Expenses/Unit Expenses/Foot Percent of EGI $4,642 $2.95 19.23% Market Operations Expenses/Unit Expenses/Foot Percent of EGI $4,767 $3.03 13.19% 12
Sale Comparables SUB - LAKE CITY RETAIL & LAND 14038-40 Lake City Way NE, Seattle WA Year Built 1947 Building Size 3,146 Lot Size/Zoning 13,193 / NC3-40 Sales Price $795,000 Price/Bldg SF $252.70 Price/Lot SF $60.26 Sales Date TBD 1. DEVELOPMENT SITE 14315 Lake City WayNE, Seattle WA Year Built 1948 Building Size 11,216 Lot Size/Zoning 27,084 / NC3-65 Sales Price $2,049,000 Price/Bldg SF $264.36 Price/Lot SF $75.65 Sales Date 9.19.2017 2. LAKE CITY DEV SITE 12038 33rd Ave NE, Seattle WA Year Built 1949 Building Size 1,420 Lot Size/Zoning 6,600 / LR2 Sales Price $826,500 Price/Bldg SF $582.04 Price/Lot SF $125.23 Sales Date 8.9.2017 4. LAKE CITY RETAIL BUILDING 12335 Lake City Way NE, Seattle WA Year Built 1946 Building Size 2,638 Lot Size/Zoning 2,900 / NC3P-65 Sales Price $595,000 Price/Bldg SF $225.55 Price/Lot SF $205.17 Sales Date 4.29.2016 3. WEDGEWOOD MONTESSORI 11006 34th Ave NE, Seattle WA Year Built 1949 Building Size 4,545 Lot Size/Zoning 15,480 / NC1-30 Sales Price $1,500,000 Price/Bldg SF $330.03 Price/Lot SF $96.90 Sales Date 9.21.2016 5. DEVELOPMENT SITE 13524 Lake City Way NE Year Built 1925 Building Size 6,720 Lot Size/Zoning 22,747 / C1-65 Sales Price $1,400,000 Price/Bldg SF $208.33 Price/Lot SF $61.55 Sales Date 3.18.2016 13
Sales Comparables Map Lake City Retail & Land Op 14038-14040 Lake City Way NE Seattle, WA 1. Development Site 14315 Lake City Way NE Seattle, WA 2. Lake City Dev Site 12038 33rd Ave NE Seattle, WA 3. Wedgewood Montessori 11006 34th Ave NE Seattle, WA 1 LAKE CITY RETAIL AND LAND OP 4. Lake City Retail Building 12335 Lake City Way NE Seattle, WA 5 5. Development Site 13524 Lake City Way NE Seattle, WA 4 2 3 14
Paragon Real Estate Advisors ABOUT PARAGON Paragon Real Estate Advisors is the leading Seattle real estate investment firm for multifamily property sales in Washington State. We have accrued over $3 billion in sales and have closed nearly 1,700 successful real estate transactions. We are locally owned, client-focused and highly experienced. When it comes to apartments and investment real estate in the Puget Sound region, we are the smart choice to partner with. At Paragon, we build long-term partnerships that help our clients reach their long- and short-term real estate investment goals while maintaining maximum profitability for them. Our brokers have an in-depth knowledge of the Washington state real estate market, particularly in the greater Seattle area and the I-5 corridor, that comes from more than 20 years experience in the industry. Paragon s unique focus on sharing knowledge, teamwork and collaboration within the brokerage industry leverages our collective intellect for all our clients. Our brokers provide superior customer representation through our innovative and effective marketing campaigns, co-brokerage, skilled negotiations, and ongoing partnerships. The information found in this offering memorandum has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. 15