HAYDEN ISLAND BUSINESS PARK
The property is situated on the border of Oregon and Washington on Hayden Island, a 1.7 square mile island with approximately 2,100 residents and the last off-ramp North before entering Washington State along the I-5 Freeway. The I-5 bridge crossing the Columbia River was scheduled to undergo a replacement which would have caused traffic delays for eight years. However, in early August the State of Washington pulled funding and the project evaporated. This has caused a revitalization of tenants, who were once concerned about accessibility, interested in the location.
Furthermore, Portland is in the planning process to develop 300 acres to the west of the property as a shipping terminal. While not yet fully approved, the City has completed a positive economic feasibility study. Initial plans do not indicated additional industrial development, leaving Hayden Island Business Park one of two industrial properties within 15 minutes.
The major driver of tenants to Hayden Island is the auto auction, located adjacent to the subject property. The Auction is owned by Manheim, a subsidiary of Cox Communications and a national credit in itself. As Oregon does not have state sales tax, the auction has a large draw from auto dealers in both Seattle and Portland. Within Hayden Island Business Park, 62% of the occupancy is auto-related. The majority of auto-tenants use their space to store cars before going to auction or being shipped to dealers, with only light repairs being completed onsite. This alleviates environmental concerns however, BKM will complete a Phase I test prior to acquisition.
The property has extremely limited competition within the immediate area. Only one other industrial property exists on Hayden Island but only provides suites greater than 5,000 sq ft, providing options for only two of the tenants at the subject property. The remainder of the competition is of similar vintage, located near the airport which is approximately a 15 minute drive. These options are significantly less desirable to the auto-related tenants. These tenants typically drive a car to the auction, then walk back to the property to get the next car. Being 15 minutes away from the auction requires either a significant investment in an auto trailer and/or a significant increase in labor.