500 Mercer

Property Overview 500 Mercer is a leased investment anchored by a co-working company and shadow anchored by QFC Grocery (Kroger Company). Located in the Lumen Condominiums, a mixed-use steel and concrete condominium project.

• Prime Location: Directly across from The Bill and Melinda Gates Foundation headquarters and The Seattle Center’s EMP Museum, Space Needle, Seattle Opera, and Northwest Ballet.
• High Traffic Area: Situated at a busy intersection, connecting major Seattle neighborhoods.
• Diverse Tenant Mix: Including food and drink, fitness, and co-working office space, catering to a dense trade area.

Challenge

The QFC grocery shadow anchor, occupying a condominium within the property, was not interested in selling. This created a unique challenge in finding buyers who were comfortable with controlling a minority interest in the condominium association. The complexity of the situation required a nuanced approach to ensure the satisfaction of all parties involved, particularly in maintaining the value and stability of the investment.

Action

Our team took strategic steps to address this challenge:

1. Structuring a Leaseback and Rent Holdback: We successfully negotiated a long-term lease with the anchor tenant and arranged a rent holdback for a vacant space. This move was crucial to guarantee the income stability needed to obtain financing for the buyer.
2. Securing Favorable Loan Terms: The leaseback and rent holdback agreements played a pivotal role in enabling the buyer to obtain favorable loan terms.
3. Aligning with Seller's Financial Goals: Our strategy aligned perfectly with the seller’s financial expectations, facilitating a seamless transaction.

Result

The buyer capitalized on a long-term investment opportunity in one of Seattle's most sought-after locations. The strategic approach culminated in a successful transaction.

Testimonial

"This transaction was a complex amalgamation of three deals to create a successful sale. Erik and Mike masterfully handled the intricacies of the leaseback, holdback, and guarantees, crafting a win-win scenario for all parties involved"

Alan W., Seller