Totem Hill Plaza
- Sale Amount: $8,300,000
- Sale Date: April 2015
- Building Square Feet: 20,081 SF
- Land Area: 137,655 SF
- Zoning: TL 4B
- Location: Kirkland, WA
12301 120th Ave NE
Kirkland, WA 98034
Totem Hill Plaza was acquired in January 2006 as a syndicated investment. Located in Totem Lake just off of Interstate 405 and adjacent Fred Myer, the property was positioned in a strong region. Two years later, as the onslaught of 2008 came and went; Totem Hill, along with much of the real estate world, had low occupancy and remained that way for years. The combination of high vacancy and leverage on the property resulted in an underperforming asset.
The AGM Solution:
The property has undergone significant change since the initial investment. A stand-alone restaurant space was previously situated in front of the center; for years the business was thriving, at the turn of the market however the restaurant went under. After negotiations with the neighboring Fred Myer (Kroger), AGM signed a long term lease and replaced the restaurant with a gas station. Aside from the development project, AGM focused its efforts on leasing the main building and securing comparative rental rates for each of the spaces.
The new gas station improved visibility of the primary building, and provided a stable long term cash flow. AGM leased the remaining vacant suites and the building started to outperform our initial projections.
Nine investors, all located in the Pacific Northwest, were seeking a strong investment on the East Side. Totem Hill Plaza was purchased for $6,500,000, dividends were distributed in four of the nine years, the remaining five were distributed at the sale, and the property sold in April 2015 for $8.3 million. The investment realized an 8% annual return on investment, and 9% cash on cash.