The Aviator Proposal

Prepared for

The Renton Airport & City of Renton


Proposal Offering Memorandum

The owners of Raven Real Estate Co. (“Lessee”) are pleased to present this proposal for a ground lease of the property located at 300 Rainier Avenue N Renton, WA 98057 (the “Property”). This Offering Memorandum (“Memorandum”) is being delivered to the Renton Airport and the City of Renton. The Memorandum is confidential and Lessor agrees it will only be provided to those individuals necessary to evaluate and respond to the Memorandum. Lessor agrees and acknowledges that Lessee will suffer damages if the Memorandum’s confidentiality is not maintained. By acceptance hereof, each recipient agrees not to reproduce or use in whole or in part the information contained herein, or any other information that is not already public, and to use this Memorandum only for the purpose of evaluating the leasehold offering.


Contact Information:

Radley Raven | radleyraven@remaxotl.com | (206) 487-3700

Alexandra Raven | amclean1159@gmail.com | (425) 877-9078

Table of Contents

I. Investment Summary

Section 4

II. Ground Lease Terms

Section 5

III. Project Narrative

Section 6

IV. Our Team

Section 7

V. Financial Capability

Section 8

VI. Market Overview

Section 9

VII. Schedule

Section 10

VIII. Lease Application

Section 11


I. Investment summary

Overview

Welcome to the The Aviator. The gateway to our beautiful city where our community and visitors alike find cool, sophisticated spaces for work and play. This modern industrial multi-purpose plaza will showcase stunning architecture highlighting views of bustling jets set to embark on adventure.  

This integrated building will feature local restaurants, modern work spaces, and offer retail services while paying homage to the wondrous world of aviation as it has been the backbone of industry for our region for the last 80 years. A place to enjoy first class spaces and unique elements that only our city has to offer.

As residents of the community, we want to develop this property to reach its full potential elevating the offerings on the South West side of the lake, and further contributing to the growth that our city has planned. The Aviator will be a critical element in launching our community forward.

Site Summary

Address:

300 Rainier Avenue N

Renton, WA 98057

Land Area:

50,482 SF

Zoning:

IM

Property

The property is located on the east side of Rainier Avenue South adjacent to the Renton Airport in the city of Renton. The site is rectangular in shape and includes the space between the right of way on Rainier Avenue South on the west to the rough right of way on Perimeter road to the east.

Neighborhood

The airport and surrounding neighborhoods are evolving quickly and in need of quality places to work and play. With prices skyrocketing in Seattle and Bellevue, Renton has been coined the the newest pacific northwest tech hub. The Renton Airport and the Boeing Plant are at the center of this growth.

Being residents of the Lakeridge area ourselves, we have personally felt the void of having a lack of great places to dine, coffee, or work for the day. We plan to become a destination for the young work force and families moving into this area, as well as, integrate with the large aviation community already here.

Environmental

Existing building likely to contain asbestos and lead-based paint material.

Existing site

The site has an existing 3,280 square foot building that sits partially on city property and partially on airport property. In order to remodel and/or conduct commercial activity within the existing building, it would require a significant overhaul: seismic upgrade, asbestos and lead abatement, as well as code updates to the electrical and plumbing systems. Instead, Lessor proposes to demolish the existing structure and expand the development site to the east slope allowing the new development to be contained on airport property only (see site plan).


II. Ground Lease Terms

Base Rent

Lessee is proposing an absolute net ground lease with a monthly rate of ______________.

Term

The proposed term is 99 years, subject to Lessee maintaining improvements.

Rent Escalations

Lessee is proposing base rent to be adjusted annually to reflect any percentage increases in the Seattle Area Consumer Price Index for “All Urban Consumers” (CPI-U; 1982-1984 = 100). To facilitate Lessee's financing, now or in the future, the increases will include a floor of 2.0% and a cap of 4%. Additionally, the underlying land will be re-appraised, without reference to current use, once every 10 years beginning at the commencement of year 20.


Due Diligence & Option Periods

In exchange for (1) the consideration discussed in the “Option Contract and Earnest Money” section below and (2) subject to the parties agreeing to an option contract acceptable to both of them, Lessee will receive two (2) option periods relative to the Property. Each option period will be for a six (6) month term, the first term commencing upon the execution of the option contract. The option periods will be used to inspect the Property, secure project financing and sponsorship, anchor tenant(s) and conduct general feasibility and other due diligence. The option periods will also be used to negotiate an acceptable lease with the Lessor(s) relative to the subject Property.

Lease Commencement Date

The ground lease will commence upon the execution of the ground lease.

Rent Abatement

Lessee shall be entitled to free base rent for the first twenty four (24) months of the ground lease or until an occupancy permit is issued relative to the “Aviator” construction project, whichever is later.

Option Contract & Earnest Money

In exchange for the first option period, Lessee will deposit $10,000 (the “Earnest Money”) with Rainier Title or other trust account/escrow company of Lessor's choice. If a lease is negotiated and entered during the first option period, the Earnest Money will be applied to base rent. If Lessee chooses to not execute its rights relative to the second option period, Lessor is entitled to keep 20% of the Earnest Money ($2,000) and the rest of the Earnest Money will be returned to Lessee.

In exchange for the second option period, Lessee will, within two (2) weeks of the end of the first option period, (1) notify Lessor of its intent to execute its rights relative to the second option period and (2) deposit an additional $5,000 in Earnest Money with Rainier Title or other trust account/escrow company of Lessor’s choice. If a lease is negotiated and entered during the second option period, all Earnest Money ($15,000) will be applied to base rent. If no lease is entered into during the second option period, Lessor is entitled to keep 25% of the Earnest Money ($3,750) and the rest of the Earnest Money will be returned to Lessee.

Closing Expenses

The parties will share the escrow expenses on an equal basis. Lessor and Lessee shall pay their own legal and real estate advisory fees.

Completion Assurance

The Lessee will provide bonding or other financial assurances required by lessor relative to any construction, major renovation or other alteration of, or on, the Property.

Lessee's First Right of Refusal

In the event the Lessor elects to sell its interest in the ground lease, Lessee will have a right of first offer to acquire Lessor’s interest.

III. Project Narrative

Designed to support Renton's growing and revitalized community, this building provides flexible spaces for various office space types, amenities, retail, restaurants and cafe's while keeping to the scale of the area and nodding heavily to the aviation history of the airport, for which the views are oriented and the aesthetic is based.

The sophisticated industrial aesthetic will lend itself well to provide a lot of natural light utilizing tall warehouse windows, hanger doors and inverse doors at various locations providing views to the runway and access to the exterior.

BUILDING SPACE TYPE OFFERINGS:

  • RESTAURANT AND BAR
  • WALK-UP EATERY
  • CO-WORK SPACE FACILITY
  • PRIVATE OFFICE SPACE
  • INDUSTRIAL OFFICE SPACES FOR:

  • AEROSPACE
  • LIGHT INDUSTRIAL
  • RETAIL SPACES WITH VIEWING TO THE WORK SPACES FOR:

  • COFFEE ROASTERS/CAFÉ
  • BREWERY/BAR
  • CONFECTION/BAKERY
  • SHIPPING, PRINTING RETAILER
  • BUILDING AMENITIES:

  • CAR CHARGING STATIONS
  • SMART PARKING
  • MOTHER’S ROOMS
  • YEAR ROUND COVERED EXTERIOR PATIOS AND DECKS
  • WATER FRIENDLY LANDSCAPING
  • Designed using current technology, eco friendly materials, and efficiently designed building systems; this building will provide efficiencies for both the tenants and building management in cost savings and protecting the environment by building green.

    Exterior renderings

    Building plans

    Building Area Summary

    USE ABOVE RAINIER

    LEVEL

    Gross Floor Area

    Rentable Lease Area

    Parking (Office)

    CoWorking Style Office

    2

    7,250 SF

    7,250 SF

    14.5

    Retail & Office

    1

    14,220 SF

    14,220 SF

    28.4

    Restaurant (1)

    1

    2,300 SF

    2,300 SF

    15.3 Rest

    USE BELOW RAINIER





    Parking

    P1

    15,812 SF


    51 stalls

    Office/Industrial

    S1

    6,240 SF

    6,240 SF

    12.5

    Office/Industrial

    S2

    12,272 SF

    12,272 SF

    24.5


    TOTALS

    58,094 SF

    42,282 SF

    96




    Site Plan - existing conditions

    Proposed Site Plan

    Floor Plan - Level L2

    Floor Plan - Level L1

    Floor Plan - Level P1

    Floor Plan - Level 1

    Floor Plan - Level 2

    Roof Plan

    Exterior Elevation - East

    Exterior Elevation - North

    Exterior Elevation - South

    Enlarged Plan - Restaurant

    Building Section

    Building Section

    Building Section

    Other Renderings


    IV. Our Team

    Raven Real Estate Co.

    Our team of architects, engineers, operators and commercial real estate consultants have combined over 100 years of experience in real estate development, commercial operations, and commercial design. With each of us bringing our unique experiences to the runway, we are excited to take off.

    Alexandra Raven

    Partner, Operations and Project Lead

    Alexandra was in Restaurant operations for 14 years with Earls Kitchen and Bar. This Canadian based restaurant chain moved this girl state side to embark on their US expatiation taking its family owned chain to 68 restaurants between Canada and the US. Her roles have had her specializing in high volume restaurant operations, opening and training, managing renovations, and leadership development. Her expertise is now focused on business consulting, leadership training and executive coaching. Alexandra has a long standing appreciation for aviation, as her family owns a private corporate/executive charter airline company out of Vancouver, BC. Anderson Air has been family owned and operated since its inception in 1980. This has been apart of her life since she was born.

    Outside of her career, she spends her time learning new lesson from her two daughters ages one and three. Quite possibly teaching her more in the last three years then all the others combine. Family time and traveling are the highest on her list of things to be doing.

    Radley Raven

    Partner, Chairman and Project Visionary

    Radley Raven started building his real estate career learning from his father, a former builder and currently a senior appraiser for the assessor's department. It was here that Radley learned valuable insight, education, and understanding for property and appraisal values. After college, he built his business and entrepreneurship skills, learning all that it takes to complete a deal from start to finish. Between 2010 and 2015, he sold over $15 million of consumer goods to big box retailers such as Costco and Lowe's, brought several new products to the mass market, launched companies, and negotiated contracts with major corporations. With these experiences, Radley brings a keen sense for deal making, market research, and willingness to roll up his sleeves and jump right in to help push any project forward until completion.

    Erik Robbins

    Advisor, Commercial Real Estate Development & Leasing

    Erik has been actively involved in Real Estate since 1999. Over the last 20 years he has been involved in real estate transactions in excess of $300,000,000 and carried many responsibilities. These roles have included sales, development, advisement, corporate liaison, and project management. This work has also brought him into many interesting and diverse projects located in Arizona, Tennessee, Washington, Haiti, and Costa Rica.

    Outside of real estate, Erik enjoys the outdoors, spending time with family, and flying. As the son of an Air Force Officer Erik has been around aviation his entire life. He is an active private pilot and aircraft owner and frequently flies around the Western United States with his family.

    Triston Swanson

    Legal Advisor, Commercial Development, Construction & Leasing

    A lawyer should be a value added product. Our job is to improve our clients’ situation and leave our clients better off economically than when they walked through the door. This is why before even agreeing to take a client’s case, I put myself in the client’s shoes to see if getting a lawyer involved even makes sense. And, if it does, my animating concern is reaching the right result, the right way for the individual client. No client or piece of litigation is the same. I pride myself on creating strategies for successful outcomes that are tailored precisely to my clients and the unique situations they find themselves in.

    Stock and Associates

    Architect | Design & Engineering Firm, Commercial Real Estate

    Stock & Associates is a creative, technically accomplished, and committed group of professionals who have been working together since Bruce Stock started the company in 1996. With more decades of experience that we choose to count and hundreds of successful projects under our belts, this is the team with the demonstrated skills bring your project to fruition. We believe that good design informed by deep technical expertise can solve most challenges. Our team has extensive experience in a wide range of project types including, higher education facilities, research and development laboratories, corporate interiors, office buildings, and many residential projects. The scale can be as large as a corporate campus, or as small as a kitchen remodel. The breadth of our professional expertise helps create an intelligent balance between a project’s design quality, schedule, and budget. In short, we deliver projects of maximum value that are in tune with our client’s definition of success.

    Blox Construction

    Consultant, Commercial Development & Construction

    With more than 15 years in the construction industry, Blox Construction completes projects on time, within budget, and delivers the outstanding quality our clients expect. Our experienced employees provide accurate budgets, project scheduling, quality control, job-site safety and subcontract supervision.

    Blox construction has successfully completed a wide variety of projects from kitchen and bath remodels to four story ground up structures. Commercial tenant improvement to ground up complex commercial construction project. Custom built homes to cafes, restaurants, and art studios. Blox has the people and experience to fit the requirements of most any construction project.

    V. Financial Capability

    The estimated total all-in cost of the project is $19,627,379 and will be funded in two parts: (1) private equity and (2) commercial loan. Approximately $6,870,000 will come from private equity with the remainder to be financed by a construction converted permanent loan. The loan will carry an interest rate of approximately 5.0% and a term of 20 years.

    Lease rates: Commercial premises

    Type

    Level

    SF

    PSF

    Annual Rent

    Office

    2

    7,250

    $32

    $232,000

    Retail/Office

    1

    14,220

    $34

    $483,480

    Restaurant

    1

    2,300

    $36

    $82,800

    Industrial/Of

    S1

    6,240

    $28

    $174,720

    Industrial/Of

    S2

    12,272

    $28

    $343,616


    Total:

    42,284


    $1,316,616


    Projected net income

    See below for our project net income analysis over a period of 5 years.

    Notable Numbers:

  • Annual Net Operating Income at full stabilization: $1,133,604
  • Debt Coverage Service Ratio: 1.29
  • Expense Ratio: 20%
  • Area map

    VI. Market Overview

    General market overview

    "The perfect flux of a limited land supply, a strong and diverse economy and Ecommerce’s industrial real estate drive (particularly Amazon’s) once again lead our market to historical highs." NAI Puget Sound Properties

    Demographics

    Renton, WA has a population of 98,499 people with a median age of 35.8 and a median household income of $66,050. Between 2015 and 2016 the population of Renton, WA grew from 97,234 to 98,499, a 1.3% increase and its median household income grew from $64,802 to $66,050, a 1.93% increase.

    Neighborhood analysis

    Growth

    We are starting to see Renton's city vision of including a lively mix of residential, office, retail, and entertainment opportunities come to fruition.

    With developments like South Port under way, boasting to create upwards of 6000 jobs and 2.4 million square feet of living, hotel, and office space Renton is poised for leap frog growth within the next two years. With the potential addition of the a high speed ferry service from South Lake Union to the south point of Lake Washington, it will only increase the traffic to our area.

    Rainier Avenue South is already in the top 10 for the heaviest traffic flow arterials in our city, with an average weekday count of 44,500 cars per day.

    The economy of Renton, WA employs 52,626 people and expected to grow with the addition of South Port.

    Rental rates

    Driven by Amazon and other tech companies, Seattle has moved up the ranks of the nation’s most expensive places to rent an office, passing Chicago and Los Angeles just in the last three years.

    During that span, Seattle office rents have surged 31 percent, or about 2½ times faster than the national average, according to an analysis by Cushman & Wakefield for The Seattle Times. Despite the surge in office rents, vacancy rates remain extremely low.

    Over the past decade, Seattle has added about 8.8 million square feet, according to the Broderick Group. Amazon alone has taken about 8.1 million square feet as of last summer, and its footprint has only grown since then leaving little to no room for anyone else.

    Cost Breakdown

    Average annual rents citywide have surged past $40 per square foot for the first time, surpassing Chicago (about $38) and Los Angeles ($39), according to the analysis from Cushman and Wakefield. That level is still well behind San Francisco ($70) and Manhattan ($72). Boston and Washington, D.C., remain more expensive than Seattle, as well.

    The nationwide average is just over $30.

    Across all building types, the average rent in Seattle was $41.16 per square foot at the end of last year, up from $34.67 at the peak of the upswing last decade, and from a low of $26.44 during the recession.

    Inventory & construction

    According to Colliers International, there is approximately 5 million square feet of commercial space in Seattle currently under construction that is pre-leased. This shows the demand for commercial space in the general area. As Seattle becomes more and more expensive, companies will look to the outlying areas for more affordable space.

    The largest project in the Renton area currently is at South Port. This project will add 2.4 million square feet of living, hotel, and office space.

    VII. Schedule

    Construction is expected to take between 12-14 months from start to finish. A detailed schedule shall be provided prior to the end of the due diligence period.

    VIII. Lease Application


    Lets take flight.

    Contact Information:

    Radley Raven | radleyraven@remaxotl.com | (206) 487-3700

    Alexandra McLean | amclean1159@gmail.com | (425) 877-9078

    Terms & Conditions

    Terms & Conditions

    Proposal Offering Memorandum

    The owners of Raven Real Estate Co. (“Lessee”) are pleased to present this proposal for a ground lease of the property located at 300 Rainier Avenue N Renton, WA 98057 (the “Property”). This Offering Memorandum (“Memorandum”) is being delivered to the Renton Airport and the City of Renton. The Memorandum is confidential and Lessor agrees it will only be provided to those individuals necessary to evaluate and respond to the Memorandum. Lessor agrees and acknowledges that Lessee will suffer damages if the Memorandum’s confidentiality is not maintained. By acceptance hereof, each recipient agrees not to reproduce or use in whole or in part the information contained herein, or any other information that is not already public, and to use this Memorandum only for the purpose of evaluating the leasehold offering.