Panattoni Development Co. and its equity partner, LaSalle Investment Management, sold the fully leased two-building campus in Des Moines Creek Business Park for $111 million. One of the buildings in the nearly 512,150-square-foot campus houses Bartell Drugs’ new distribution center. The campus, 21202 24th Ave. S., is three miles south of Sea-Tac.
With different equity partners, Panattoni developed all four phases and now has sold three of the four for a total of $222.6 million. The phase that houses the Federal Aviation Administration regional headquarters remains unsold. Real estate trade group NAIOP in 2016 named the FAA building its development of the year. MetLife is Panattoni’s equity partner on the FAA project.
At nearly $217 per square foot, the sale of the fourth phase sets a record for the region, according to Kidder Mathews broker Chris Corr. He and colleague Peter Wooding marketed phase four for lease.
“In South King County and the Kent Valley, this is the best number ever to be achieved,” Corr said.
The area around the development doesn’t have as bad of traffic congestion as the Kent Valley, it’s closer to Interstate 5 and there is no train traffic to deal with, he said. In addition, rents are lower than in Seattle by around 30 percent.
“Selling against the Kent Valley was easy as pie,” Corr said.
CBRE brokers Brett Hartzell and Darla Longo listed phase four for sale. Hartzell declined to comment.
Most of the business park is under Sea-Tac’s flight path. In the late 1980s, the Port of Seattle bought up homes in the area as part of a noise mitigation program. The port tried for years to get the development off the ground. A proposal for a big-box retail center was shelved during the recession, and another proposal to build a large facility for Puget Sound Energy faltered.
Most of the Des Moines Creek park is on port-owned land. Phase IV, however, is not.
Development continues in the business park. The port chose Trammell Crow Co. to develop an approximately 460,000-square-foot development, which is under construction. It’s in the city of SeaTac.
There is one more port-owned development tract in the park.
Among the other tenants in the fourth phase are Outdoor Research gear manufacturer, which moved from its longtime home in Seattle, and moving and storage company Clutter.