December 14, 2021

Boeing sells Renton office buildings

Photo by Cary Kopczynski & Co. [enlarge]

Building 10-16 was developed and built in 1988 by Skanska, with Curtis Beattie & Associates as the architect.

Boeing has sold a possibly empty Renton office complex and parking, at 530 Park Ave. N., for a nominal $12 million, according to King County records. Boeing had owned most of the property for decades.

The price doesn't appear to make sense, since the property is assessed at around $43 million. A prior purchase agreement, signed in November, indicated a pending $13 million deal — which also seems too low. Not all documents pertaining to the sale were available before deadline, and not all details could be verified.

The buyer was ION Renton LLC, which is associated with AAA Management of San Diego, an active multifamily developer in our market. No new plans have been filed.

The two Renton properties are on the north and south sides of North Sixth Street. The north parking lot E1 is nominally addressed at 600 Park, which is actually a separately owned lot with an espresso stand on the corner of Sixth. East of that, the Boeing E1 lot has about 2.2 acres, and was acquired from PACCAR in 1995 for about $907,000

South of Sixth, on over 4.7 acres, are a structured parking garage with an unknown number of stalls, and two office buildings. What Boeing calls Building 10-13, to the south, has three stories and 52,587 square feet; it dates to 1980. The newer north Building 10-16 has seven stories and 218,157 square feet; it dates to 1988. Both may be vacant. Skybridges connect the three structures.

An easement filed with the sales documents indicates that residential development is prohibited where Building 10-16 now stands facing Sixth. That's about one third of the south property. The rest, Building 10-13 and the garage, could be redeveloped — along with the north E1 parking lot.

Brokers were not announced; Cushman & Wakefield has represented the struggling aircraft maker in a series of recent property dispositions. For the two old Renton office buildings, the deal was nominally worth about $44 per square foot; but that may not reflect the overall value to the deal.

Renton's office vacancy rate is much higher than premium areas of the Eastside like Bellevue and Redmond. Kidder Mathews recently estimated that the combined Renton-Tukwila vacancy rate is 19%.

AAA Management is currently underway on 168 units in Interbay and 215 units in Shoreline, where it recently completed and sold the 163-unit Geo.

Badly hurt by the pandemic and 737 Max debacle, Boeing this spring confirmed last year's Seattle Times report that it would market several of its real estate assets — including the Renton headquarters buildings for its commercial airplanes group, aka BCAG.

That BCAG complex hasn't yet sold. However, during 2021, Boeing has sold about 310 acres near Frederickson to Panattoni and Crow Holdings for $200 million; and six office buildings in the Eastgate area of Bellevue to Westbrook Partners. That summer sale netted about $139 million.

Puget Sound Business Journal reported this spring that Boeing was selling off office furniture and even plants from various properties including Building 10-16.

Not yet sold, a few steps northwest on Park, is Building 10-18, where the official Boeing Store is still in operation.

Tuesday morning update: State Department of Ecology records indicate that the north E1 lot is badly polluted from past manufacturing use by PACCAR. A preliminary cleanup plan is pending, but a determination of No Further Action (NFA) from Ecology is likely years away for the new owner.

South of Sixth, Boeing already had an NFA for what Ecology calls Garden Plaza. That polluted site was once home to a Shell heating oil distributor, beginning in 1943; and later also to Sunset Coal & Oil and Renton Boilerworks.

The NFA was issued after Boeing bought the complex from the original landowner and developer, Michael R. Mastro. The recent sale comes with a covenant against residential development and soil disturbance where the north building (Building 10-16) now stands, which also contributes to the low sales price. It seems unlikely the latter building will ever be demolished or replaced.

Boeing acquired the south Garden Plaza property in 1989 from Mastro and partners, as part of a larger 10-building deal valued at $211 million. The 96-year old Mastro later declared bankruptcy in 2009, and in 2011 fled to France, where he remains a fugitive from justice.