exclusive listing proposal

Although all information furnished regarding property for sale, rental or financing is from sources deemed reliable, such information has not been verified, and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice.

Exclusive Listing Proposal

Prepared for:

NITZE-STAGENFrank Stagen

Chief Executive Officer

Kevin DanielsPresident

Angela DavisDirector of Property Management

Prepared by:

GVA KIDDER MATHEWSTed McCaffray, Vice President

Jim Kidder, SIOR, Vice PresidentCraig Hogan, SIOR, Vice President

September 9, 2003

JK/proposals/Nitze-Stagen/Listing Proposal.ppt

Starbucks Center


Table of Contents

Executive Summary

Property Overview

MarketOverview

Marketing Plan &

Timeline

GVA Kidder

Mathews Team

ListingStructure

Section I

Section II

Section III

Section IV

Section V

Section VI


Executive Summary

Property

Starbucks Center consists of approximately

2,000,000 square feet on 17 acres. The property

is the focal point of the SODO Business District.

Two large areas are available: 36,000 square

feet on the third floor and 80,000 square feet on

the second floor.

Real Estate Market

There is approximately 65,408,953 square feet

of industrial warehouse and office space in the

Seattle close-in market. The current vacancy

rate for mid-year 2003 is 5.68% (January 1, 2001

vacancy 1.9%).

Triple net lease rates for comparable buildings

average $0.25 to $0.30 per square foot,

blended.

Concessions of one-half month of free rent per

year of the lease term are common. Office

tenant improvements are generally provided on

an “as-is” layout but with new paint and carpet.

New office build-out is generally amortized.

Rent escalations range from six to nine percent

increases in the beginning of the fourth year of

a five-year lease term.


Executive Summary

Marketing Team

We have assembled this team of professionals at GVA Kidder

Mathews with the skills necessary to achieve the optimal outcome

for Starbucks Center. Criteria used in assembling the team included:

1) experience in representing landlords and owners in the market;

2) track record in successful completion of similar leasing

assignments; 3) high levels of integrity and strong relationships in

the real estate community; and 4) diligent cold calling efforts.

Ted McCaffray, in conjunction with Jim Kidder, SIOR and Craig Hogan,

SIOR, will lead the GVA Kidder Mathews marketing team. Combined,

these individuals have 50 years of experience with leasing

institutional quality business parks. The balance of this report

outlines our proposal to assist Nitze-Stagen in successfully leasing

the Starbucks Center.


Property OverviewStarbucks Center

Property Profile: Starbucks Center

Address: 2401 Utah Avenue S.Seattle, WA

Total Building Size: 2,000,000 SF

Year Built: 1912 - 2002

Clear Height: 10’

Construction Type: Concrete poured in place

Other: MultistoryFreight elevatorsSeismic upgrade



Property Profile: Starbucks Center

Strengths

• Quality corporate image• Central SODO location• Excellent access• Multiple office entries• Divisible• Near Port of Seattle• Managed dock-high loading• Concrete truck apron• Truck leveler• Dock equipment

Limitations

• Low ceiling height• Freight elevators• Access to elevators is distant• Additional material handling



Competitive Properties for Lease

There are approximately 10 industrial buildings available for lease in the 35,000 to 100,000

square foot range. The lease rates for comparable buildings range from $0.25 to $0.30 per

square foot, triple net. Rent for office ranges from $0.30 to $0.70 per square foot, depending

upon whether it is existing office or build-to-suit.



Competitive Projects for Lease

PropertyAddress

Avail. Sq. Ft.

Office

Clear Height

Loading

Lease RateShell/Office

Comments

SUBJECT

Starbucks Center2401 Utah Avenue South

Seattle

115,000

BTS

10’

2 DH

$0.36

Recommending lower asking rate.

Disston Building1705 4th Avenue South

Seattle

43,525

20’

3 DH

$0.53

Good location. Possible retail component. Rate is high.

Gerry Sportswear1041 1st Avenue South

Seattle

58,492

3,000

10’

3 DH

$0.50

Located near stadiums; building hotel across street. Parking revenue carries property. Owner needs to lower lease rate or spend money to take to next level.

Hanford Central26 South Hanford Street

Seattle

119,771

6,000

18’-20’

20 DH

$0.45

Primarily trying to sell. Lease rate is high.




PropertyAddress

Square Feet

Office

Clear Height

Loading


Comments

Owl Transfer & Storage3623 6th Avenue South

Seattle

73,335

17’-22’

16 DH / 2 GL

$0.37

Space is chopped up. Great freeway access. Priced right for smaller divisions.

West Waterway3546 W Marginal Way SW

Seattle

66,672

2,000

22’-26’

3 GL

$0.33

Good power, okay location, limited parking. Has been on market for 2 years.

Former Mesher Supply5001 1st Avenue South

Seattle

70,476

0

12’

7 DH

Main Floor - $0.40Upper Floor - $0.25

Probable tear down and redevelop.

City Commerce Park3849 1st Avenue South

Seattle

36,000

6,000

14’-16’

4 GL

$0.25

Vacant for 2 years, 20’ x 20’ column spacing. Owner offering first year rate of $0.25 per square foot.




PropertyAddress

Square Feet

Office

Clear Height

Loading


Comments

Military Road S Building8300 Military Road South

Seattle

90,838

16,000

24’

4 DH / GL

$0.52

Trying to divide and conquer. Catering to smaller tenants. Terrible access.

Amazon.com Distribution550 South Dawson Street

Seattle

99,852 (divisible)

7,000

24’

12 DH / 1 Ramp

$0.51 - $0.52

Great space. Only one year sublease.


The Seattle close-in industrial market is typically considered to be the area north of the Kent Valley to downtown Seattle. The area is bound by I-5 to the east and West Marginal Way to the west. The industrial area follows the route of the Green River or Duwamish Waterway. This area has provided a level topography, which has been developed since the turn of the century.

The close-in market is within the Seattle city limits with some portions located in unincorporated King County and the City of Tukwila. The market consists of 65,408,953 total square feet. Typical of this market are older facilities with high site coverage, low ceiling heights and challenged loading capabilities. The majority of tenancies are 10,000 to 20,000 square feet.

Industrial Market AnalysisThe close-in industrial market has experienced very flat demand for space over the last six months. We anticipate the market will stabilize in the first quarter of 2004. The current vacancy rate is 5.68%. This is the highest vacancy rate the close-in market has experienced since it was near 5% in the late 1980s. Accordingly, the market is giving steep discounts and has substantially increased lease incentives (i.e., free rent). Broker incentives have increased to full 5% fees on most leasing commissions, with some landlords offering bonus commissions in addition (i.e., trips, $0.50 per square foot of leased area).

Market Overview


Market Overview

Rental RatesThe rate for the distribution space in the close-in market is trending toward $0.45 per square foot, NNN. Prices vary from this based on functionality, location and size. Most spaces over 30,000 square feet have had to offer rates in the $0.35 per square foot range. As tenants increase their size beyond 30,000 square feet, economies of scale come into play and tenants are easily swayed by the lower rates in the Kent Valley (i.e., $0.25 to $0.30 per square foot).

Rate RecommendationWe recommend marketing the space on the second and third floors at $0.25 per square foot, NNN.


Phase I - Preparation

Property Detail Report Our first step in preparing to market a property is to complete a property detail report. We will tour the property and assemble information as required. This information includes floor plans, zoning and land use data, site maps, building specifications, operating systems information, structural reports and utility information.

As this information is assembled, we work with our clients to identify unanswered questions which may be asked by prospective tenants. A strategy is then developed to deal with these issues in order to expedite interest in the property. Signage

GVA Kidder Mathews will consult with the client and visit the property to determine the best location for sign placement. Signs are strategically placed to maximize exposure to oncoming traffic. Specific information can be placed on the sign to provide prospects with helpful information regarding square footage; however, generally sign copy should be simple to maximize the number of inquiries.

Marketing Plan



PhotographsGVA Kidder Mathews will arrange to photograph the property to maximize prospect interest. In some cases, it may be necessary to have aerial photos prepared to show sites in perspective to their surroundings. We will coordinate with local photographers to arrange shots which create the best image possible. These pictures will then be inserted into the appropriate marketing materials.

Maps & DemographicsComprehensive maps and demographic information are helpful to informed decision-making. GVA Kidder Mathews can prepare specific demographic reports and maps which include existing facility locations, employee zip codes, customer locations and proximity to key access routes. Additional information, such as income, age, population, or other key data requested by the client, can also be included. This capability is available on a local, regional, or national/international level.

Marketing Plan


Preparation of Marketing Materials


Site/Floor PlansFloor plans and/or site plans will be assembled, utilizing architectural drawings provided by our clients or by taking measurements and preparing in-house graphic diagrams. These plans are prepared to give interested parties a clear overview of how a property can be utilized.

Detail SummaryDetailed information on the property is summarized on one page for a mass marketing campaign. Key information relating to square footage, site features, operating systems and pricing is discussed.

BrochureOnce the property detail report is completed and photos have been developed, a professional brochure can be printed, which includes key selling points of the property, a location map, photo of the site and contact information.

Marketing Plan


GVA Kidder Mathews Web Site Listing information will be posted to the GVA Kidder Mathews company web site at www.gvakm.com. Listings are updated monthly and are frequently visited by agents and brokers as well as potential tenants.

GVA Kidder Mathews Featured PropertyListing information can be posted to the “featured properties” section of the company website at www.gvakm.com. Listings are rotated monthly and are frequently visited by agents and brokers, as well as potential tenants.

CBA Multiple Listing Service Information will be submitted to the Commercial Brokers Association (CBA) for publication on their web site. In addition, listing information is made available through the CBA Advantage dial-up listings database.Market Reports GVA Kidder Mathews distributes semiannual reports on the Greater Seattle real estate market, received by more than 1,500 business and property owners. These reports, which are critical to underwriting, are designed to provide current information on the various real estate submarkets, as well as inform recipients of new listings and recent transactions. Currently, these reports cover the industrial, office, retail, apartment and investment specialties.


Marketing Plan


Phase II - Execution

Electronic MailWithin the first week of signing a Listing Agreement, GVA Kidder Mathews will send out an electronic brochure to a list of all active commercial real estate agents announcing the availability of the Starbucks Center to the market.

Direct Mail CampaignGVA Kidder Mathews will implement a direct mail campaign designed to maximize exposure of the Starbucks Center and increase awareness of its availability. Specific groups will be targeted as follows:

Active Target Prospects. GVA Kidder Mathews is constantly tracking prospects in the marketplace. When a new property is listed, the parameters of this property are cross-referenced with known requirements and a target list is developed. Information is then sent to those prospects and follow-up calls are made to generate interest.

S.I.C. Users. For properties which require a specific use, a prospect list will be pulled from our computer database. These users can be identified locally, regionally or nationally based on Standard Industrial Classification (S.I.C.) code, as well as by number of employees or other specific parameters.

Marketing Plan

Geographic/General Mailings. Mailings are sent out to prospects who are located in the immediate area around the subject property or who are known to have an interest in certain product types.


Cold CallingWe will personally contact prospects who have been targeted for the site. These prospects will be contacted on a priority basis. Calls will be tracked via computer or a prospect log so that reports can be generated on an ongoing basis.

CommunicationWe will monitor all marketing activity and current status updates shall be communicated to the owner. Communication activity shall include:• Verbal and e-mail status reports

• Ongoing marketing activity letters

• Copies of letters sent to inquiring brokers and prospects

• Periodic meetings between clients and GVA Kidder Mathews agents to ensure open communication channels

Tours & Coordination of Due Diligence We will arrange all property tours and coordinate due diligence with contractors, architects, space planners, engineers, lawyers, accountants, city planners, developers, financial analysts, environmental specialists and others necessary to assist in facilitating the transaction.

Negotiating and Closing We will work diligently to generate Letters of Intent and offers on the property. These documents will be analyzed by the appropriate parties and their attorneys. We coordinate the negotiations in order to reach agreement on terms and conditions, and shall work to address appropriate issues necessary for closing.

Phase II - Execution

Marketing Plan


Storage companies

Public warehouses

Garment manufacturing

Printing companies

Drapery manufacturing

Storage for

Museums

Theatres

Ballet/dance studios

Proposed Users

Marketing Plan

Space specific / low visibilty users

High security

Regional companies


Extensive industrial experience

Dominant market share

Close-in market coverage

Creative transaction structuring

Integrity and credibility with brokerage community

Extensive national coverage through GVAKM

Ranked #1 Firm – Industrial Leasing Brokers

Why GVA Kidder Mathews?

GVA Kidder Mathews Team


Active Puget Sound Real Estate Firms(Current Listings According to CBA)

CompanyNo. of

Listings% of

Listings

GVA Kidder Mathews(Listing Team)

38 listings(23)

34% of all listings(20%)

CB Richard Ellis 15 13%

Colliers 8 7%

Puget Sound Properties 5 4%

Andover Company 3 2.6%

Trammell Crow 3 2.6%

JSH Properties 2 1.7%

American Warehouse 2 1.7%

Piha / Rogel 2 1.7%

Westlake & Associates 2 1.7%

Morris Piha 2 1.7%

9 other companies 1 each <1%

TOTAL 113

Survey conducted via CBA 8/22/03 area 150, 155 properties for lease only


Lease

We are proposing a fee of five (5)

percent of the total lease consideration

for the first five years of the lease, and

two and one-half percent (2.5) percent

for years 6 through 10. In the event

that an agent other than the listing

team is the procuring agent, we are

proposing a fee of seven and one-half

(7.5) percent of the first five years, and

three and three-quarters (3.75) percent

for years 6 through 10, in order to

compensate the outside agent with a

full fee (5% to outside agent, 2.5% to

listing agent). No fee will be payable

for lease terms in excess of 10 years.

Listing Term

GVA Kidder Mathews proposes a six-

month listing term.

Reporting

Reporting will be handled on several

fronts. GVA Kidder Mathews will

maintain verbal communication with

owner throughout the process. We will

e-mail owner after each incoming

contact on the building. At owner’s

request we can have formal marketing

meetings on a regular basis.

Listing Structure

exclusive listing proposal

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