Belshaw Assemblage Case Study

In the summer of 2016, the Kidder Mathews team connected with the ownership group of the Belshaw Assemblage in Seattle’s northern Rainier Valley submarket and began advising them about the general growth within the current development market in Seattle as well as the market’s appetite for environmentally contaminated property. After several months of strategy meetings, lengthy valuation analyses, and numerous discussions regarding the marketing plan and next steps for the property, the Kidder Mathews team and the ownership came to an agreement to take the property to market.

The Belshaw Assemblage is located in Seattle’s more traditionally industrious south Seattle/Rainier Valley neighborhood. The property served numerous industrial uses, including at one point, the manufacturing of donut making equipment for one of the largest donut equipment manufacturers in the world. Throughout many of these industrial uses, and from the proximity to several contaminant-prone businesses, the Belshaw Assemblage had accumulated contaminations within both the underlying soil and groundwater. Nevertheless, several decades of legal discussions had helped to clarify the situation while the general neighborhood and surrounding city experienced a booming economic growth, pushing this property’s value to all-time highs with significant redevelopment potential.

The Kidder Mathews team has extensive experience in working through environmentally contaminated development sites, but the Belshaw Assemblage created a different sort of challenge with the long list of potential liable parties on the hook for cleanup costs. Further, pre-existing agreements between the ownership and some of the neighbors created a stringent process within the cleanup was to be structured. Aside from the environmental challenges and ensuing liability issues, the Kidder Mathews team had a significant challenge marketing this property as a development site in an area that had never seen much large scale mixed use multifamily developments.

After a thorough and lengthy analysis of all of the information related to the property’s history, as well as a broad market survey to better explain the future potential for the property in a widely unknown submarket, the Kidder Mathews team launched a custom marketing package to a wide range of buyers. The Kidder Mathews team had the property in the market for several months, constantly communicating the property’s upside to a wide range of buyers. After identifying several, strong prospective buyers, he Kidder Mathews team  conducted intensive interviews and selected a buyer best suited for both the environmental cleanup and the future development of the site. That buyer included a partnership between a well-respected private developer who was financially backed by one of the stronger investment arms throughout the Puget Sound and a non-profit developer that had extensive experience working within a new piece of state legislation to assist with the cleanup of contaminated properties. The resulting sale helped set the pricing benchmark for a previously uncharted multifamily development market while also allowing the seller to realize its goals financially.

With a better understanding of the property and the local regulatory agencies’ desires for developing the property, the he Kidder Mathews team went out to a wide buyer pool with a focus on some of the larger, local institutional buyers, like hospitals, schools, churches, and Indian Tribes. While at market, the Kidder Mathews team kept an open line of communication with the owner and often relayed messages from the market, the city, and the county. Eventually, the Kidder Mathews team sourced one of the local Indian Tribes. That buyer presented a strong, fast, and above-asking price offer, satisfying numerous needs of the selling owner. The buyer, in the meantime, with the assistance of the Kidder Mathews team’s diligence, was able to quickly inspect, via numerous long tours, the adequacy of the property and eventually closed exactly as planned in their offer. In the end, despite the complexities of the property, all parties parted ways extremely satisfied about the resulting transaction with the owner receiving a price point near record highs for land values in Kitsap County.