Bellevue Terrace is a value-add Class B office building in suburban Bellevue.
|Targeted Investor IRR:||18.5%|
|Targeted Equity Multiple:||1.8x|
|Targeted Stabilized Cash Yield:||6.0%|
|Targeted Investment Period:||3-5 years|
|Distribution Commencement:||October 1, 2022|
|Offers Due:||October 20, 2021|
|Funds Due:||October 20, 2021|
|Targeted Project Level IRR:||22%|
Bellevue Terrace is an exceptionally well-located suburban office property in one of the strongest office markets in the United States. SMARTCAP will lease up the remaining vacancy, mark rents to market upon roll (and convert the remaining full service gross leases to triple net), upgrade the amenities, and take advantage of the unique supply and demand dynamics in Bellevue, WA.
The remaining vacancy has a flexible layout which will enable SMARTCAP to either lease the suite to one tenant or demise into two or three smaller suites, which will expand our pool of potential tenants. Our marketing strategy will be to highlight the easy access to 405 and I-90, proximity to the soon-to-be completed Mountains to Sound Greenway Trail and the Eastgate Park and Ride, the views of Bellevue, and most importantly the unique opportunity for freeway visible building signage. There is no other opportunity in the market for a tenant of less than 20,000 square feet to have this type of signage.
While the vacancy rate at the property is high, the weighted average lease term of 6 years offers protection. In the event of a downturn in the market or longer-term COVID impacts than projected, the property will not have a significant vacancy increase in the next 3 to 4 years.
Bellevue Terrace is being sold by Swift Real Estate Partners. Swift is selling because they have reached the end of their targeted 5-year hold period and are closing out a fund. Although the property is not stabilized, they acquired the asset at a low basis in 2016 and will recognize strong returns.
The expected hold period for Bellevue Terrace is 3 to 4 years. Our initial focus will be stabilizing the asset, addressing the deferred maintenance, and upgrading the amenities. We will then be in the best position to take advantage of market growth to mark the leases to market upon expiration. This will allow us to maximize the value by our targeted exit date of 2024-2025.
SMARTCAP is a direct real estate investment firm operating in the Puget Sound area, one of the top real estate markets in the world. Your risk is minimized by acquiring assets at value-add pricing. Our track record for our entire portfolio is over 23% IRR paid to investors, net of fees and expenses.
Investors are our life-blood and appreciate our detailed monthly communication and financial reporting. Your questions are answered quickly and with honesty and transparency. You will receive monthly updates, including detailed property summaries and financial reporting, as well as monthly distributions.