Kidder Mathews brokered three building sales in Olympia’s downtown core, totaling nearly $40 million. The transactions demonstrate increasing interest from investors and developers in the Thurston County suburban market.
More attractive pricing, Opportunity Zone in downtown Olympia, and great access to Olympic Peninsula and Puget Sound are creating economic boost. With the flexibility to work remotely, people are moving out of large cities and businesses are following, which is improving demand for investments in smaller markets like Olympia. Meanwhile, mixed-use projects are soaring based on demand for housing.
Thurston County’s office market has been steadily gaining strength in recent years. According to Kidder Mathews research and CoStar, in 2021, total vacancy was 2.6% — a hair away from its pre-pandemic rate of 2.4% in 2019. Occupancy has increased dramatically over the past decade, up more than 9% since 2012.
“The suburbs are buzzing. Businesses and people are moving here, and we are seeing a big increase of interest in downtown Olympia based on demand for more affordable housing and opportunity zone,” said Kidder Mathews Vice President Amy Evans.
In one of the largest office transactions in the history of Thurston County, Eastside Plaza, a four-building, 128,941-square-foot property sold for $30.4 million to Boyd Watterson, an Ohio-based investment firm. Kidder Mathews’ Evan Parker and Amy Evans represented the seller in the transaction, which closed in December. The plaza is located at 1112 S.E. Quince Street and is nearly fully occupied with only one vacancy and solid lease income from several state government tenants.
Heritage Park Redevelopment
Evan Parker and Amy Evans represented Heritage Bank in selling the office and retail building located on nearly an entire city block at 5th and Water Street for $5.35 million. Kidder Mathews’ Holly Yang and Freya Jin represented the buyers, Water Street Associates and Steven Lou. They purchased the 26,736-square-foot building and adjacent land as an Opportunity Zone property for redevelopment in December.
Situated near Capital Lake and Sylvester Park with water views, it is one of the largest sites in Olympia’s downtown core. Heritage Bank, founded in Olympia, will remain on two floors of the main building as a tenant. The prime corner location with a solid existing building and additional redevelopment opportunities will be a significant project in downtown, where mixed-use developments are soaring based on demand for housing. Water Street and Lou previously constructed 123 4th Apartments, the first large apartment complex in Olympia.
AM Global Capital
One block from the Heritage Bank property, the former JCPenney building and adjacent land at 521 Capitol Way South was purchased for $4.1 million by AM Global Capital in December for a mixed-use development. Kidder Mathews’ Evan Parker represented AM Global, and Amy Evans represented the seller. Most recently used as office space, the 32,343-square-foot building is situated on a half-acre and sold as an Opportunity Zone property with potential for redevelopment.
About Kidder Mathews
Kidder Mathews is the largest independent commercial real estate firm on the West Coast, with 900 real estate professionals and staff in 21 offices in Washington, Oregon, California, Nevada, and Arizona. Kidder Mathews offers a complete range of brokerage, appraisal, asset services, consulting, project and construction management, and debt & equity finance services for all property types. The firm performs $10.9 billion in transactions, manages 62 million square feet of space, and conducts over 2,600 appraisals annually. For more information, visit kidder.com.