10a. Presentation - Terminal 106 Ground Lease
Item No. 10a supp Date of Meeting May 25, 2021 Terminal 106 Ground Lease Approval Action Requested Request Commission authorization for the Executive Director to execute the Ground Lease Agreement and associated easement for the redevelopment of Terminal 106 between Trammell Crow and The Port of Seattle. 2 Redevelopment Opportunity: Terminal 106 Property Details 31.23 Acres 533,910 sf dilapidated Redevelopment Site warehouse ConGlobal leases property to west and south of existing W-2 warehouse Port of Seattle and Conglobal NWSA developing offices for Customs and Border Patrol in building W-2 A portion of W-2 also leased to LIHI 3 Competitive RFP Demonstrates Strong Market "The Puget Sound region is Port sent RFP to 30+ qualified real estate developers absolutely on fire relative to industrial logistics space right Seven developers submitted development proposals now." Trammell Crow Company ("TCC") selected as CBRE preferred developer. TCC has developed or acquired more than 2,600 buildings "Industrial real estate demand valued at more than $60 billion and over 565 million square on the rise in the U.S." feet. JLL TCC developed the Port's Des Moines Creek North property "In most markets, more than half of the product under construction is preleased" Transwestern 4 Port of Seattle Partners with Trammell Crow to Develop State of the Art Multi-story Warehouse 5 New Development Supports Maritime & Logistics Industries Project supports regional logistics, maritime & manufacturing industries. 650 to 1200 jobs Generates income for Maritime operations & capital projects Developer commits to prevailing wages during construction and apprenticeship utilization; diversity in contracting goals Redevelopment protects industrial lands and enhances freight mobility. Trammel Crow will develop a 2-story 695,000 square foot light industrial warehouse on Terminal 106 6 Strong Market for Industrial Development MARKET RENT PER SQUARE FEET 7 Financial Summary Site area Total Leasable Development Site Area 15.07 acres Total Proposed Building SF @700,000 SF T106 Stabilized Annual Income $3,500,000 Cost Basis Port Remediation Credit $2,500,000 Port Feasibility & due diligence costs $250,000 Total Cost Basis $2,750,000 NPV $71 million MIRR 12% Payback period 18 months 8 Project Milestones Commission Demo & Construction Authorization to Execute Rent Commencement Ground Lease May May November M ay 2O21 20 23 2023 2 024 Complete Due Diligence, Substantial Completion & DD Waived & Lease Full Rent Commencement Commencement T106 Ground Lease Development Recap Requesting Commission authorization to execute the Ground Lease and associated easement with Trammell Crow to redevelop Terminal 106 warehouse. New facilities will support logistics and maritime industries Excellent market timing for new development Substantial completion of development by Q4 2024. APPENDIX 11 SVINY 133S (Ss330v IN Ba SS3IDOV ININ3ESY3 SLL 610) SOL SAEReh 21 3 PyWSSNMR eh = a | 12 .5% SZ MM _65 9S .LN Georgetown Crossroads 13
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