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02 Oct Off
LEASE TRENDS
The graph below indicates annual NNN asking rates are inconsistent, with the 2019 average asking rate identical to the 2014 rate ($14.00/SF) and, as the trend line indicates, annual asking rates are flat, if not trending downwards slightly.[1]
Current Vacancy Levels
CJM’s survey of area properties indicates vacancy of about 11.50%, although the smaller properties (under 20,000 sq. ft.) reported a vacancy rate of about 6.50%.
CAPITALIZATION RATES
Realty Rates OAR information, which is less relevant given its national survey, suggests free standing retail building OARs are declining, while PwC’s survey suggests retail strip center (the only generally similar retail OARs available from PwC) rates are rising; CoStar’s regional retail OAR survey indicates a modest decline.
The six Yakima properties listed in the table below
were tenant-occupied and sold during the past four years. Overall
capitalization rates (OARs) among the Yakima sales presented range from 4.57%
to 10.52%
with a central tendency of 7.42%
COMPARABLE CAP RATE SALES
| No. | Designation/Location | Year Built/Ren. | Sale Date | RSF | Sale Price | OAR |
| 1 | Lincoln Subway, 1607 West Lincoln Ave, Yakima | 2004 | May 29, 2019 | 1,600 | $460,000 | 6.52% |
| 2 | Nob Hill Building, 2201 West Nob Hill Blvd, Yakima | 2002 | May 1, 2019 | 6,545 | $920,000 | 9.13% |
| 3 | Nob Hill Mixed-Use Building, 2112 West Nob Hill Blvd, Yakima | 1977 | December 13, 2016 | 9,910 | $750,000 | 10.52% |
| 4 | Tahoma Square, 1905 South 1st Street, Yakima | 2015 | September 26, 2016 | 4,736 | $2,800,000 | 5.67% |
| 5 | Union Gap Strip Center, 1601 East Washington Ave, Union Gap | 2006 | June 1, 2016 | 9,745 | $2,075,000 | 8.11% |
| 6 | Red Robin – Yakima, 2702 W. Nob Hill Blvd., Yakima | 2014 | September 2, 2015 | 5,800 | $1,923,909 | 4.57% |
SALES TREND OVERVIEW
The data indicates sale prices are generally ranging from about $120 to $150/sq. ft. since 2015, with 2019 prices up about 10.5% year-over-year with 2019 sales volume the highest since 2015.[2]
Marketing & Exposure Periods
Yakima competing commercial building sales reported marketing periods generally ranged from about six to 12 months over the past six-plus years with volume averaging about 65,000 sq. ft. per year.
OVERALL MARKET CONCLUSION
Research indicates Yakima annual retail rates are
inconsistent, with a downward trend; the selected comparable rentals reported
annual rates ranging from about $5.75 to $30.00/sq. ft., reflective of the
inconsistent market. CJM’s survey of area properties indicated vacancy of about
11.50%,
although the smaller surveyed properties (under 20,000 sq. ft.) reported a
vacancy rate of about 6.50%.
Competing market commercial building sale prices per sq.
ft. ranged from about $125 to $150/sq. ft., with recent volume increasing.
COMPARABLE RETAIL BUILDING SALES
| No. 1 | No. 2 | No. 3 | No. 4 | No. 5 | |
| Name | Mariscos El Nayarita | Mercado Latino #2 | Greek Kabob Restaurant | Ding Ho Restaurant | Lone Star Ranch House |
| Address | 601 Fruitvale Blvd | 718 South 6th Street | 3312 West Nob Hill Blvd. | 1502 W. Washington Ave. | 8807 Ahtanum Road |
| City | Yakima | Yakima | Yakima | Yakima | Yakima |
| Market | North Yakima | Central Yakima | West Yakima | SW Yakima | SW Yakima |
| Sale Date | April 1, 2019 | October 26, 2018 | March 23, 2018 | April 13, 2017 | January 10, 2015 |
| Year Built/Ren. | 1955 | 1925 | 1996 | 1945 | 1984 |
| Building GBA | 3,211 | 3,042 | 2,368 | 5,703 | 3,370 |
| Building RSF | 3,211 | 3,042 | 2,368 | 5,703 | 3,370 |
| Parking Adequacy | Appears Adequate | Appears Below-average | Appears Adequate | Appears Adequate | Appears Adequate |
| Site Location | Corner | Corner | Corner | Corner | Mid-block |
| Frontage[3] | 175 feet | 170 feet | 220 feet | 150 feet | 155 feet |
| Exposure[4] | ~10,000 ADT | <5,000 ADT | ~21,000 ADT | ~12,000 ADT | ~5,000 ADT |
| Vehicle Ingress/Egress | Direct | Direct | Direct | Direct | Direct |
| Sale Price | $110,000 | $320,000 | $342,500 | $780,000 | $332,500 |
| Price/SF | $34 | $105 | $145 | $137 | $99 |
| Comments | Single-story former-Mexican restaurant located on the northern periphery of the Yakima CBD; adequate onsite parking, fire damage in April 2018 | Single-story commercial building with frontage on commercial arterial; no onsite parking | Single-tenant restaurant building on corner lot in a commercial corridor of Yakima. | Single-tenant restaurant building in a transitional neighborhood near the Yakima Airport. | Single-tenant restaurant building in a residential neighborhood of Yakima. |
[1] Data courtesy of CBA
[2] Data courtesy of CBA
[3] Per County GIS mapping service
[4] Per WSDOT & STDB/ESRI
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| CJM Advisors is a full-service commercial real estate appraisal and advisory firm. CJM appraisers come from a variety of backgrounds in real estate, finance, planning, and education. CJM has as owners, partners or employees three individuals who hold the MAI designation of the Appraisal Institute (appraisalinstitute.org). Designated members have met rigorous requirements relating to education, testing, experience and demonstration of knowledge, understanding and ability. The MAI membership designation is pertinent to our work here at CJM. Appraisers who hold this designation are experienced in valuation and evaluation of commercial, industrial, residential, and other types of properties. These appraisers are qualified to advise their clients on a broad range of real estate decisions. |
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