The business park has sold 10 units in the past year, more are on the block
A 30-year build-out of EastRidge Business Park is nearing fruition. The business park is selling of a number of units and preparing to break ground on two new buildings, which may be the last constructed on the 90-acre property with more than 1 million square feet of space.
In the past 12 months, EastRidge has sold 10 units, with an additional seven awaiting buyers, four of which are in escrow. In all, EastRidge is selling 153,822 square feet of office, flex, R&D, light manufacturing and retail space for approximately $14.6 million.
Of the more than 60 buildings on the campus, EastRidge has retained ownership of 26 of the buildings. EastRidge also owns the 284-unit Prairie View Apartment complex in the northeast portion of the property. Since first breaking ground on the business park in 1976, it has gone through several phases of construction and property sales. T.J. Fontenette, managing principal of EastRidge, said many of the business park’s buildings were originally designed to be sold off, and have been as the market demanded.
“We have known that certain people want to own their own real estate,” said Fontenette. The demographics of buyers tend to be an even cross section of owner/users and investors, said Fontenette.
The recent sales represent the largest block of units offered at one time. Fontenette cited low interest rate levels as driving demand. And ownership within EastRidge presents a unique opportunity, he said.
“Given the amount of transactions we have had in a short period of time, sales volume is above average,” said Fontenette. “It is hard to find small buildings in a large, mixed-use, master-planned business park.”
East-Ridge is currently operating with a vacancy rate of about 6 percent, which represents “very good activity,” said Fontenette. About 120 businesses occupy EastRidge.
Bill Connelly, vice president of Eric Fuller and Associates, said vacancy rates across the board in the county are at about 8.6 percent, but he expects them to drop closer to EastRidge’s level by the end of the year. Despite the high cost of constructing or purchasing a building, low interest rates are driving sales, said Connelly.
“The desire to own is still very strong,” he said.
The real estate market, including EastRidge, was hit hard when the tech industry bottomed out in the late 90s, said Connelly, causing demand and lease rates to decline. But with vacancy rates finally returning to near 5 percent, Connelly expects lease rates to rise, which may surprise some tenants. And with the cost of construction continuing to climb, businesses will be between a rock and a hard place.
The two new buildings planned for EastRidge, expected to break ground in September, will be situated adjacent the first group of buildings constructed on the site, in the western portion of the property along SR 503.
The 35,750-square-foot project is expected to cost $5 million and be completed in spring 2006. The two buildings will accommodate up to 12 tenants on a build-to-suit basis. The buildings will feature a brick and glass facade.
The last construction within EastRidge included several buildings constructed in 2000 and 2001. The new construction will remain under EastRidge ownership, said Fontenette, who does not anticipate placing additional units up for sale in the near future.
It may also represent the last construction to take place within EastRidge, said Fontenette. But EastRidge always has its eyes open for land for further development, said Fontenette. The company is looking at “feasibility scenarios” for a 30-acre parcel in Battle Ground along SR 503. A proposed 108-acre mixed use development including 80 acres of light industrial nearby has been stalled for at least two years.