A major shopping center in Gig Harbor is put up for sale
The Fred Meyer store at 5502 Point Fosdick Dr NW is the anchor tenant of
A major Gig Harbor shopping center is for sale.
Olympic Towne Center, an 18-acre shopping plaza anchored by a regional Fred Meyer grocery, is on the market for a suggested $63.9 million, the offering agent confirmed Friday.
The property on Point Fosdick Drive is owned by WWR Properties of University Place. Besides the grocery store, it contains Oceans 5 entertainment center and 21 other tenants, including AutoZone, Kaiser Permanente, PetSmart and Jimmy Johns. A small parcel across the street, occupied by Heritage Bank, is also part of the sale.
Kidder Mathews, the offering agent, said the shopping center is thriving and 98 percent full.
“We put it on the market last year, but then coronavirus hit, and we sort of scaled back,” said Dave Speers, a KM vice president. “Now we’re bringing it back to the market.”
The listing was first reported by The Registry, an online trade publication.
The owners of the property, the brothers Walter, Wayne and Robert Hogan, did not immediately return calls. They are well-known regional developers whose other properties include Olympic Village in Gig Harbor and University Village in University Place.
According to an offering memorandum, the shopping center has about 7,000 visitors a day. It’s located at 5518 Point Fosdick Dr. NW, just off the Olympic Drive exit from state Route 16.
The major tenant, Kroger Corp., signed a 20-year ground lease in 2015 for its Fred Meyer grocery store, which can be extended to 2073. Kroger, the memo notes, is the second-largest retailer in the U.S., with an estimated $191 billion in revenue in 2019.
Kroger recently sold many of its Northwest stores to an institutional investor in a lease-back arrangement, including two in Tacoma. The Gig Harbor store was not included in that deal because it already has a long lease.
Other tenants have rotating lease expiration dates, and most of them are what Kidder-Mathews calls “e-commerce resistant.”
The shopping center had a rocky beginning. A squabble with the city in 2017 over easements and upgrading of a nearby traffic light held up the Fred Meyer opening for many months. The building sat, completed but empty, from August to October of that year, until the issue of easements on 32nd Avenue were settled.
Kidder-Mathews said the shopping center features 235,853 square feet of space in 10 buildings.
The first business on the site were Key Bank and Starbucks in 1982, followed by the Dairy Queen in 1986. Olympic Plaza, which totals 14,148 square feet, was completed in 1999. The final phase, and the vast majority of the property — about 213,500 square feet — was added in 2017.
The standoff with the city was over whether an additional entrance was needed on 32nd Avenue and who would pay for the added left-turn lane and stoplight revisions.
In its pitch to prospective buyers, Kidder-Mathews noted the relative prosperity of Gig Harbor, pointing out that the 26,000 people who live within three miles of the shopping center have an average household income of $114,000 a year.
“Olympic Towne Center provides an investor solid in-place income from successful tenants, strong rental growth, and an unparalleled location in Gig Harbor,” the offering memorandum says.