QFC-Anchored Northtowne Shopping Center Sells for $14.5M

Challenge

The Northtowne Shopping Center, anchored by QFC with an additional 13 retail businesses, occupies just under 3.2 acres with 49,767 square feet of retail space in north Bellevue. NAI Puget Sound Properties Partner Dean Altaras had an established relationship with the property’s owners dating back to 1992, serving as both an asset manager and broker for the local family. The family’s Seattle-area investments had been ongoing since the early 1900s, and by the time Dean began working with them their portfolio was sizable but under-performing. Dean began “a 20+ year plan to reposition, leverage and trade the portfolio into well located and high performing real estate throughout the region. This included primarily retail, office and multi-family properties. Over the past 10 years, the portfolio has been liquidated, with the Northtowne Shopping Center being the last piece of the puzzle.”

Dean and his partner, Billy Poll, originally listed the Northtowne Shopping Center in 2016, but learned at that time there was a “significant environmental issue” from a previous tenant that had been onsite in the 1980s. Combined with the onset of the pandemic and subsequent slowing of the economy with rising interest rates, the prospects were initially slim, but Dean and Billy were up for the challenge.

Action

While studying and characterizing the environmental issue, Dean and Billy continued to engage with buyers, and the property went in and out of contract three times. They removed the property from the market during the pandemic as the landscape changed and adapted during those years.

As this was the final step for their clients to complete the move of their assets out of commercial real estate, Dean and Billy re-listed the shopping center in 2022 and began to seek out new buyers. They leveraged online marketing on local, regional, and national levels to ensure any potential buyers could be reached. The Bellevue market, fortunately, remained relatively strong throughout the challenges of recent years, which helped the process go more smoothly as well.

Results

After seven years, the Northtowne Shopping Center finally closed for a sale price of $14.5 million in Q3 of 2023. Dean says of the process:

“I credit both buyers and sellers for bringing seasoned and innovative environmental and legal teams to the transaction. Through their creative and nuanced approach to the issues, and their resolve to work together, we were able to execute a successful closing of the transaction.”

The ultimate success of this transaction demonstrates that despite the challenges the commercial real estate market may be facing, well-located and stabilized investment properties can still find investors willing to purchase them.

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