Jason Hershey

In the February newsletter, I sent out the January Sales summary for all three counties. I didn't go into a lot of details, so let me know if you need more information.

Snohomish County

6 sales were reported by CBA in January. All but one were industrial properties, located in Everett/Mukilteo, Lynnwood, and Monroe. The average price was just over $100/SF

An impressive 29 sales were reported for King County in January. In King County, the majority of sales were Office properties, followed closely by Industrial properties. There was a few land and Retail sales also. Prices for office properties averaged $146/SF and industrial properties averaged $83/SF.

Pierce County

13 sales were reported for Pierce County in January. These were almost evenly divided between Industrial and Retail properties. Industrial properties averaged just under $70/SF and retail properties averaged almost $127/SF.

It is the end of 2010 and time to review sales in the local area and the outlook for the future. Large commercial firms with in-house analytics teams, such as Cushman & Wakefield and Grubb-Ellis, do not generally report on real estate activity outside of the Seattle/Bellevue markets. However, data from those markets can be used to make inferences about the health of more suburban markets, including East King County and Snohomish County. Third quarter reports indicate that market will remain soft in the short term, but is about to turn around. Absorbtion rates for office and industrial properties are negative, but the rate at which space is coming on the market has slowed and general interest in leasing new spaces has increased. With the overall lack of new development, absorbtion rates are likely to turn around in the next year... though the market is unlikely to improve quickly.

The sales market is slowly improving, or rather the negative trend has slowed down. Lower prices have brought out investors looking to pick up solid investments. One area to be cautious about is lending. 2010 and 2011 are the years when a large number of commercial loans will come due. Activity in the BPO market, price opinions often ordered by lenders to verify the value of properties when they are distressed or in danger of becoming distressed, has picked up in recent weeks. This suggests that a greater number of distressed properties will be on the market soon.

In the mean time, here are the statistics for last year. Numbers are based on sales reported to, or researched by, the Commercial Brokers Association.

Snohomish County Sales Summary

From January 1, 2010 to December 31, 2010, sales statistics by category are:

The following chart illustrates the number of sales in Snohomish County by month. As you can see, closings peeked in June, with close to double the sales of any other month. In fact, in 6 months of the year, there were only 5 sales closed.

King County Sales Summary

From January 1, 2010 to December 31, 2010, sales statistics by category are:

The following chart illustrates the number of sales in King County by month. As with Snohomish County, closings peeked in June. However, in general, sales were more evenly spread throughout the rest of the year.

A gentleman I know created this incredible light show in Duvall.  Its set to music (Transiberian Orchestra) and the music is broadcasts so you can listen to it from your car radio.

The show is in the Fox Hollow neighborhood of Duvall. (By the way, there are some pretty good new construction home deals in the area.

He did an amazing job!  check it out..

I've had lots of positive responses to posting slides from our other classes.  In September, I and my partner Kathi Krogh, along with Jeff Nance of Sterling Savings bank held another session of our "Right Way to Buy Foreclosures" class.

This is the class description

This class will teach you how to buy and profit from purchasing bank-owned and government owned properties. We'll go over the foreclosure process in Washington State and the opportunities and pitfalls of buying properties at various stages in the process. You will learn how to find foreclosed properties and how to work with your real estate agent and how to negotiate with the bank.  We will also cover financing options, including the rehab loan process. Although this class is designed for First Time Home Buyers, the techniques will also benefit new and seasoned investors, as well.

If you'd like information on our next class, sign up for my newsletter at http://www.nwcommercialre.com/NewsletterSignup

Here is a summary of the commercial sales in Snohomish County and King County's Eastside for the last few months. Specifically, the sales from August 1 to October 31, a 3-month period.

During this period, the average number of transactions is largely unchanged from previous months. But, the transactions are far larger, with some high-profile transactions in East King County. The data comes from the Commercial Brokers Association database, so is limited to transactions reported there.

East King County Sales

In East King County there were 17 sales during the period. In October, there were only 2 transactions closed. But, they were large transactions. The largest was the sale of a 164,000 square foot office building in Overlake for $46,000,000 ($279/SF). The building was sold to investors and was fully leased to Microsoft. The other large transaction was the sale of a 110,000 square foot Yarrow Bay office building for just over $21 million (about $195/SF).

In September, there were 9 transactions closed, the most transactions of any month this year. The largest was the sale of the The Bravern towers in Bellevue for $410,000,000. That amounts to $598 per square foot. This Seattle Times article provides most of the details. Other transactions ranged from $275,000 for 20 acres in North Bend to $15.6 million for a business park in Issaquah ($162/SF).

In August, there were 6 transactions on the Eastside. The smallest was for developable land on Bothell-Everett highway, which sold for $67,000. The largest was for a Bellevue nursing home for $7.1 million ($115/SF)

Here are links to the details:

http://www3.commercialmls.com/epropertydata/9528748399557

Snohomish County Sales

In Snohomish County, there were 30 sales during this three month period. This is a large jump compared to the previous months. Most of the sales occurred in August and September, with only 3 in October.

11 of the sales were in August. In fact, the 4 largest transactions were in August. Those 4 were:

• 53,508 SF Office building in Everett for $7,300,000 ($136/SF)
• 8 acres of land off Highway 2 for $3.5 million
• 13,162 SF Car dealership in Lynnwood for $3,100,000 ($235/SF)
• The fourth sale was a foreclosure sale, purchased by the bank, at auction. It was a 21,564 SF Retail building in Monroe which sold for $4,377,600 ($203/SF)

There were several much smaller transactions also, including a $310,000 retail property in Arlington and a Marysville office building purchased at the Trustee's sale for $350,000.

In September, there were 15 transactions. The largest was the sale of a large lot and retail building in Monroe to St. Vincent DePaul (who moved out of their previously leased space also in Monroe). The sale price was $2.4 million ($71.64/SF). Other transactions included land, office, retail, and industrial sales in Everett, Lynnwood, Mukilteo, Edmonds, and Snohomish. Sales include sales of 2 Office condos in Everett for $533,475 and $390,600 ($391 and $330 per square foot, respectively).

As in King County, sales slowed down in October, with only 3 transactions closing:

• 10,472 SF Office/etail building in Lynnwood for $1.1 million ($105/SF)
• 1.83 Acre development site in Edmonds for $725,000 ($9/Land SF)
• The only other October transaction was the purchase of a coffee stand (yes, a coffee stand!) at the Trustee's sale by the lender, for $600,000 (that would be $2272/SF for the building, or $32/SF for the land).

Here are the details of the Snohomish County Sales:

http://www3.commercialmls.com/epropertydata/3744748418150