Department of Social & Health Services (DSHS)

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INVESTMENT HIGHLIGHTS

ATTRACTIVE ACQUISITION FINANCING TERMS AVAILABLE

The current note holder on the Property is offering attractive acquisition financing for the purchase at 75% LTV, 5.50% interest, 30 or 25-year amortization for a 5-year fixed term. This loan results in an attractive first year cash-on-cash return of 7.59% and 11.63% return on equity.

WASHINGTON STATE GOVERNMENT GUARANTEE

The Lease is guaranteed by the State of Washington, which has a Fitch rating of AA+.

RECENT 5-YEAR LEASE WITH 13.5% RENT INCREASE OVER PREVIOUS LEASE

DSHS signed a new 5-year lease in August 2022 (lease length the government prefers to sign). The rent in the new lease increased 13.5% over the rent in its previous lease at this site. DSHS’s renewal option is at fair market rent, ensuring the Property’s rent continues to hedge against inflation.

RECENT $715,000+ PROPERTY IMPROVEMENTS

The Seller recently invested more than $715,000 in renovating the property, including maintenance to the parking lot, roof, HVAC, landscaping, and building exterior and interior; installation of electric vehicle charging stations; installation of new carpeting throughout the building and LVT flooring in the lobby; and new paint in the interior and exterior. The Property is in excellent condition and will not require any near-term capital expenditures.

BUILD TO SUIT W/ STRONG HISTORICAL OCCUPANCY

The Property was a build-to-suit for DSHS in 1994. DSHS has continuously operated at this location for nearly 30 years. The new 5-year lease shows their continued commitment to this site, which is tailored to their needs.

INCOME TAX-FREE STATE

Washington State is an Income Tax-Free State.

RECESSION PROOF / ESSENTIAL TENANT

The Department of Social and Health Services is an essential department within the Washington State government, with ongoing demand for services. Additionally, the demand for services only increases during times of recession, providing an investor with a strong, reliable tenant through all economic conditions.

STRATEGICALLY LOCATED ADJACENT TO MAJOR TRANSIT CENTER

The Property is strategically located in densely populated, suburban Tacoma; with over 256,000 people within a 5-mile radius. Additionally, the Property is located adjacent to a major transit center, supplying convenient public transportation options to people in need with easy access from across the region. The Property also benefits from its proximity to Safeway, Big Lots, Grocery Outlet, Dollar Tree, and UEI-Tacoma.

HIGH POPULATION GROWTH SUB-MARKET

Within a 5-mile radius, the population has grown over 15% since 2010 and is projected to increase by another 7.7% in the next 5 years.

LOW VACANCY (3.0%) MARKET WITH STRONG RENT GROWTH (12.5%)

Suburban Tacoma currently boasts a 3.0% vacancy rate and rents have increased a cumulative 12.5% over the past three years, per CoStar.

LARGE 2.93 ACRE LOT WITH AMPLE PARKING

The Property features 2.93 acres of land and approximately 175 parking stalls, providing more than sufficient space for DSHS to operate efficiently.