Meriwether acquired Russell Hall in September 2016 from Unico. The property is located adjacent to the main campus of the University of Washington at 1414 NE 42nd Street. It was developed in 2009 and consists of 5,787 RSF of ground floor retail, 38,253 RSF of office space on three floors, 30 apartment units and 120 subterranean parking stalls on 0.37 acres of land. Major tenants include The University of Washington, the National Bureau of Asian Research, and Oculus (Facebook). The commercial portions of the property were 100% leased at acquisition. The residential portion was 93% leased at acquisition.
Meriwether broke ground on the Hugo House in May 2016 on behalf of Hugo Properties. The mixed-use development consists of a six-story building including a 10,300-square foot community center (Hugo House Writer’s Center) and 1,500 square feet of ground level retail space. Parking for 95 vehicles will be located below grade. The upper floors include 80 apartment units. The project helps the Hugo House, a nationally acclaimed non-profit (www.hugohouse.org), continue to serve local writers and the arts community for decades to come by providing new “place for writers.” Project completion is anticipated by 4Q 2017.
Meriwether acquired the Ainsworth & Dunn development site in July 2015 in an off-market transaction. The property was formerly home to The Old Spaghetti Factory. We are currently in the pre-development/planning phase to renovate and expand the historic Ainsworth & Dunn warehouse located along the waterfront in downtown Seattle. The redevelopment includes comprehensively renovating the existing two-story historic landmark building and adding a new penthouse to it, which in total will provide roughly 32,200 square feet of commercial office space. The space will accommodate creative office users, emphasizing the high ceilings, exposed timber structure, and brick walls. In addition, the new penthouse will add a modern, light-filled space and expansive rooftop deck with exceptional views. The adjacent surface parking lot will also be developed with a new 62-unit apartment building with approximately 7,400 square feet of ground floor commercial space. The project also includes one level of below-grade parking that will accommodate 60 stalls. Given the exceptional waterfront location and the boutique nature of the apartment building, “10 Clay” will feature refined design standards, larger unit sizes and high quality materials that will distinguish it from the competition. Residents will also have exclusive use of a large, thoughtfully designed rooftop deck that will offer spectacular views. The commercial component of 10 Clay will feature a signature restaurant space along the west side with a large outdoor seating area and two smaller, ancillary commercial spaces along Elliott Avenue and Broad Street. We anticipate breaking ground in 4Q 2017.
The 2501 Eastlake property was acquired in July 2015 in an off-market transaction. The property includes a 7,431 RSF retail building located in the Eastlake neighborhood of Seattle, WA. The building is situated on a 10,776 square foot parcel zoned NC2-40. In addition, to the west of the Building is a 7,146 parcel zoned L2 currently used as a surface parking lot. At acquisition, the property was 97% leased to five commercial tenants.
The 3305 NW Aloclek building was acquired in July 2015. The property is a two-story suburban office building located in Hillsboro, Oregon. It was built-to-suit in 1997 and contains 40,000 square feet of rentable building area. The property was vacant at acquisition. We subsequently leased the entire building on a long-term basis to Virginia Garcia Memorial Health Care in July 2016.
Overton was acquired in August 2014 in an off-market transaction. The property encompasses a full city block (40,000 square feet) located on the north side of Portland’s Pearl District at NW Overton Street and NW 14th Avenue. The improvements include three single-story structures containing 44,000 square feet. The prior owner substantially improved the buildings and converted the use from industrial to creative office and event space. The buildings feature high ceilings with exposed trusses, open floor plans, and abundant natural light creating a highly desirable modern environment for creative office tenants. At acquisition, the property was 95% leased.
The Gregory was acquired in February 2013. The property is located in the Pearl District of downtown Portland. The acquisition consisted of the office and retail condominium portion of The Gregory and included 16,000 square feet of ground floor retail space, 31,000 square feet of office space on three floors, and 51 parking stalls. The art-deco building sits on a full city block and was built in 2001. The office and retail condominum was 96% leased upon acquisition.
Kendall Lake was acquired in December 2011. The 2-story office building is located in the Snoqualmie Ridge Business Park approximately 10 miles east of Issaquah. The building was a speculative development constructed in 2008 by Opus Northwest. At acquisition, the building was 68% occupied by Rudolph Technologies, Inc. and Barnard Construction. Prior to closing, negotiations were underway with King County for the remaining 21,000 square feet of space. The King County lease commenced in November 2012.
Market Street Warehouse was acquired in September 2005 from Associated Food Stores. The property consists of 11,000 square feet of office, 60,000 square feet of refrigerated warehouse, 30,000 square feet of freezer warehouse, and 148,000 square feet of dry warehouse space on 21.46 acres of land. The property was 21% leased at the time it was put under contract. Prior to closing, the 30,000 square feet of vacant freezer space was leased. Subsequently, an additional 86,000 square feet of dry warehouse space was leased. After converting the project into a condominium, the dry warehouse and office condominium were sold for $6.9 million in December 2007. This transaction leaves the partnership with 90,000 square feet of leased refrigerated/freezer space valued in excess of the sold portion.
Columbia Commons was acquired in December 2003. The single-story office/medical building located in St. Helens, Oregon (30 miles north of Portland). At the time of closing, the property was 70% leased, with Legacy Health Systems and various divisions of the State of Oregon as the main tenants. Columbia Commons was purchased on a 9.2% cap rate based on in-place rents at a price under 50% of replacement cost. After closing, a new third-party property management team was engaged, occupancy expenses were reduced, and the vacant space was marketed for lease. Since its acquisition, virtually all existing leases in the building have been renewed and an additional 10,000 square feet of new leases have been executed.
215 Columbia was acquired in September 2012. The 5-story office building is located in downtown Seattle at the corner of 3rd and Columbia. It was 96% vacant at the time of acquisition. Prior to closing, negotiations were underway with SEIU 775 NW for the vacant 50,000 square feet of office space. The tenant signed a long-term lease in December 2012. In June 2016 the building was sold to SEIU 775 NW, generating an IRR of 19% and a 1.8x equity multiple.
1440 NW Hoyt was acquired off-market in October 2014 from an owner-user. The site included a 40,000 square foot two-story industrial building and an adjacent 4,300 square foot parking lot. As part of the acquisition, Meriwether also acquired a 72,000 square foot warehouse in Portland’s Guild’s Lake industrial district. Plans were developed to renovate and expand the existing 40,000 square foot building to include 75,000 square feet of creative office space on six floors. Just prior to pulling the building permit, an unsolicited offer to purchase the site was received from an institutional apartment developer. The decision to sell the site, rather than move forward with the redevelopment, was based on generating strong returns without incurring construction, financing, lease-up or capital market risks. In February 2016 the parking lot was sold and in June 2016 the 40,000 square foot building was sold. These sales, combined with the earlier sale of the Premier Industrial building in October 2015, generated a combined IRR of 31% and a 1.4x equity multiple over the 21-month hold period.
Tansbourne Commerce Center was acquired in October 2011. The 4-building project consists of three office buildings and one flex building and is located in the Sunset Corridor submarket of greater Portland. Two of the office buildings and the flex building were 100% leased and a 50,000 square foot building was vacant at the time of acquisition. Overall, the project was 72% leased at acquisition. During the hold period, a long-term lease with Grass Valley was executed for the vacant 50,000 square foot building and two buildings totaling 80,000 square feet were re-leased to Kaiser Health and Nike. In March 2016 the portfolio was sold to an institutional real estate fund for $31 million, generating an IRR of 28% and a 2.6x equity multiple over the 51-month hold period.
The 19th & Mercer development site was acquired in August 2012 with construction beginning immediately thereafter. The 18,900 square foot site is located at the intersection of 19th Avenue East and East Mercer Street in the Capitol Hill neighborhood of Seattle. The 4-story development project included 50 market-rate apartment units above 6,000 square feet of commercial space and 47 parking stalls. The development was completed in November 2013 and stabilized occupancy was achieved in February 2014. In December 2015 the project was sold to a private investor in an off-the-market transaction for $25.2 million, generating an IRR of 34% and a 2.4 equity multiple over the 40-month hold period.
2850 NW 31st Avenue was acquired off-market in October 2014 from Premier Press, an owner-user. The 72,000 square foot property is located in the Guild’s Lake Industrial Sanctuary just 2.5 miles outside of downtown Portland. The Seller leased the property back at closing for eight months in order to build a new headquarters. In October 2015, the vacant building was sold to a corporate owner-user generating an IRR of 52.8% and a 1.50x equity multiple.
4550 SW Macadam was acquired in December 2010 from a private investor. At the time of acquisition, Fiserv EFT occupied the entire building. Meriwether subsequently extended the Fiserv EFT lease for five years. In October 2015, the building was sold to a private investor for $12.25 million, generating an IRR of 28% and a 2.9x equity multiple.
The Pacific Building was acquired in December 2007. The 23-story office building is located in downtown Seattle and includes 219 parking stalls on floors two through seven. The building suffered from an image problem as the prior owner was not inclined to upgrade the common areas or offer competitive TI packages. Immediately after closing, a new third-party property management team was hired, all vendor contracts were re-bid, operating costs were significantly reduced, the parking contract was re-bid (increasing parking revenue by 50%), and a significant renovation of the interior common areas and exterior was implemented.
Wallingford Plaza was acquired in June 2011 from Banner Bank. The 3-story commercial building with ground floor retail and two floors of office is located in the heart of the Wallingford neighborhood of Seattle. At the time of closing, the building was 75% leased (including a new lease with Walgreens for the entire ground floor retail space and a portion of the second floor). The base building upgrades and tenant improvements associated with the new Walgreens lease began immediately after closing with the tenant taking occupancy in March 2012. In 2013 two additional office leases were signed, bringing the building to 100% occupancy. In December 2013 the building was sold to an institutional investor generating an IRR of 24.6% and a 1.71x equity multiple.
Tanasbourne Corporate is a one-story office building located in Hillsboro, OR. Just after closing on the acquisition in December 2010, we put the property under contract to sell to Umpqua Bank. This sale closed in January 2011 at $3.65 million and generated a 2.1x equity multiple.
The Central Building is a 7-story office building located in downtown Seattle. The building was acquired in October 2005 at 65% occupancy. The property was not well managed, showed poorly, and suffered from poor tenant relations. The investment was predicated on buying a well-located building at a fraction of replacement cost in a rising office market. We immediately brought in a new, third-party on-site management team, re-bid all vendor contracts, significantly lowered operating costs, implemented a new tenant relations program, and made significant upgrades to the common areas. With the building looking and operating better, we aggressively marketed the available space and, within 12 months of closing, increased occupancy to over 98%. In August 2007, we sold the building to an institutional investor for $43.1 million. The investment generated an IRR of 81.5% and a 2.9x equity multiple.
Blanchard Plaza is a 15-story office building located in downtown Seattle. When acquired in April 2004, the property was 86% leased, with over 139,000 square feet leased to the GSA on a long-term basis. Over the first 18 months of ownership we completed a $5+ million tenant improvement project for the GSA and significantly upgraded the building’s image with a renovation of the lobby, elevator cabs, and common area hallways. We executed over 64,000 square feet of leases at rates above proforma to significantly reduce the rollover risk, and took occupancy from 86% at acquisition to 90%. In March 2006 the building was sold to an institutional investor generating an IRR of 61.4% and a 2.45x equity multiple.
The single-story office building is located in Salem, OR. When acquired in May 2005, the building was vacant except for a 100,000 square foot short-term lease back from the seller. The investment was predicated on acquiring the building at a fraction of replacement cost and redeveloping and re-leasing the building at competitive rates to government and large private sector users. Following the acquisition, we immediately brought in new third-party property management, lowered operating costs, and began developing a renovation plan for the common areas of the building including three new entrances, a new great room and new common areas. We completed ~$1.8 million of base building improvements, converted 31,000 square feet of warehouse space into office space, and executed 200,000 square feet of new leases to stabilize the building at 85% occupancy. In December 2011 we sold the building to an institutional investor resulting in an IRR of 7% and a 1.4x equity multiple.
We acquired The GSA Building from a bankrupt owner in February 2003. The single-story office buiding was 100% leased on a long-term basis to the GSA. At the time of acquisition, the building suffered from virtually non-existent property management which resulted in deferred maintenance and poor tenant relations. After improving tenant relations by hiring an on-site property management staff, making cosmetic improvements to the building, and lowering operating costs, the building was sold in August 2005 resulting in an IRR of 23.8% and an equity multiple of 1.64x.
Meriwether acquired an existing Red Lion hotel with plans to extensively renovate the asset and re-brand the hotel. Prior to closing in August 2005, we finalized a $5.5 million renovation plan and signed a franchise agreement with SpringHill Suites by Marriott. The investment was predicated on the strong Boise economy, the improving Boise hotel market, a best-in-class operator/partner, a realistic renovation plan, and the solid Marriott brand. The renovation of the property was completed on-budget in February 2006. Over the next year, we worked to re-establish the hotel in the market and developed aggressive marketing campaigns for corporate and other group business. In mid-2007, we decided it was the right time to sell the hotel due to increased competitive supply that would severely dampen near-term operating results. The hotel was sold to a REIT in September 2007 generating an IRR of 9.8% and a 1.21 equity multiple.
Meriwether acquired the Market Street Warehouse in September 2005 from Associated Food Stores. The property consists of 11,000 square feet of office, 60,000 square feet of refrigerated warehouse, 30,000 square feet of freezer warehouse and 148,000 square feet of dry warehouse. The building was 21% leased at the time it was put under contract to purchase. After leasing up the vacant space, we converted the project into a condominium and sold the dry warehouse and office portion for $6.9 million in December 2007. This transaction allowed for a complete return of capital plus a 10% preferred return.
Our primary geographic focus is Seattle and Portland.
We invest in office, mixed-use, multi-family and industrial properties. Others considered on a case-by-case basis.
$5-100 million (total project costs).
All cash, cash and new debt, or cash and the assumption of existing debt.
Income Producing Properties: We target well located assets with the opportunity to maximize value through creative capitalization, repositioning, and/or re-leasing plans.
Development: We target opportunities where patient capital is required to take advantage of market conditions, work through the design and permitting process, and ultimately build on the site or redevelop existing assets.
2-10 years (flexible).
Core, Core+, Value-add, and Opportunistic.