Goddard School

Property Overview

The Goddard School in Redmond, WA is a 10,380 SF single-tenant retail building situated on a 9.41-acre parcel fronting both Redmond Fall City Road and 228th Ave NE. Built in 1991, the property has been occupied by The Goddard School since 2011. The Goddard School operates more than 600 early education locations nationwide, and this Redmond franchise has been a consistent performer in an affluent submarket with a median household income of $227,907 within one mile.

Challenge

Our team was engaged to sell a single-tenant net-leased property with an occupying tenant whose lease history added a layer of complexity. The property had previously been sold as a sale-leaseback from the original tenant, who later assigned the lease to a new operator. The seller needed to complete a 1031 exchange, which introduced timing requirements and added pressure to identify a qualified buyer efficiently. The assignment required finding a buyer who understood the nuances of the lease structure, including multiple personal guarantors from prior operators and a long-term lease with five seven-year renewal options.

Action

Erik and Mike brought the property to market as an on-market offering, highlighting the investment-grade characteristics of the asset: a NNN lease structure with limited landlord responsibility, 3% annual rent increases throughout the initial term and all renewal options, seven years remaining on the original lease, and the excess land on the 9.41-acre site as a potential future development opportunity. The team also emphasized the depth of the lease guaranty stack, with each prior operator remaining on the lease as a personal guarantor.

Through the marketing process, it became clear that the occupying tenant had a strong interest in owning the building. Our team worked to structure a transaction that allowed the tenant to acquire the property using an SBA loan, aligning the buyer's financing approach with the seller's need for a clean, timely close to satisfy the 1031 exchange.

Result

• Sale price of $6,314,000, or $608 per square foot
• The buyer was the occupying tenant, acquired through an SBA loan
• The seller's 1031 exchange requirements were satisfied
• The transaction resolved a layered lease history, including multiple personal guarantors from prior operators, without disrupting ongoing school operations