Ballard Ship Canal

The Seattle Ship Canal Offering consists of 8 industrial buildings (71k sq ft) on over 4 acres of uplands along the Ballard side of Seattle’s Ship Canal, connecting the Puget Sound’s fresh water lakes with the Pacific Ocean. The buildings are currently occupied by multiple, smaller local industrial tenants. The property also receives a significant amount of income from its large amount of commercial moorage.

After many years of discussion regarding advice on how to position the property, the managing members of the Commercial Marine Construction Company contacted the Kidder Mathews team about a potential off-market sale. The Kidder Mathews team worked with the sellers and the sellers’ financial and legal professionals to better understand the motivations of the owners and then went to work on sourcing a solution in the market.

The Seattle Ship Canal Offering included numerous industrial buildings built largely in stages beginning in 1942. Those buildings, ranging in size from 2,900 sq ft to 32,000 sq ft, housed many local industrial tenants for several decades. The sellers had owned the property for numerous decades, though had transferred from occupying/using the real estate to a more managerial role.

As the sellers entertained the option of selling the real estate, their estate planning and tax ramifications played a large role in their overall strategy. Additionally, while maintaining a high level of consideration for the existing tenant pool occupying the property, the ownership wanted confidentiality in all discussions and negotiations regarding a sale. Finally, the State of Washington’s Department of Natural Resources played a challenging role near the end of the transaction as it attempted to modify a land lease beyond the normal scope of business.

After nearly six months’ worth of discussions and negotiations with the future buyer and sellers on this property, the Kidder Mathews team assisted in bringing the parties together to agreeable terms for this off-market transaction. The Kidder Mathews team then worked with both groups over the ensuing 16 months as the two parties worked diligently through numerous issues, including timing on tax implications, negotiating a third party lease agreement with DNR, and obtaining updated financial information regarding the existing rent roll. The resulting transaction satisfied all of the sellers’ estate planning implications while providing the buyer with a significant piece of value-add real estate in an explosive growth market in Seattle’s Ballard neighborhood.