THE LARGEST COMMERCIAL OFFICE SPACE SALE IN THE HISTORY OF JUNEAU IS COMPLETED IN DECEMBER.   The acquisition of over 92,000 square feet of office space in two buildings was closed in early December.  The buildings, located at 400 and 410 Willoughby Avenue were purchased by the Central Council, Tlingit Haida Indian Tribes of Alaska, after 22 months of negotiation with the seller, a California investment group.  The buildings currently house state tenants including the Department of Environmental Conservation and Natural Resources.  Plans for re-tenanting the vacant spaces are pending.  Replacement values for the two buildings range from $26,000,000 to $30,000,000.  The Carlton Smith Company represented the investor.

OLD WALMART LOCATION IS NOMINATED FOR CONSTRUCTION OF POSSIBLE CITY HALL COMPLEX.  After being vacant for several years, the old Walmart location on Old Glacier Highway is being considered as the new location for a new City Hall according to a recent survey of Juneau residents that was conducted by the CBJ.  Touted for its large site and open concept, the building at first seems logical to re-purpose as a municipal complex.  But problems with the site include the cost of renovation into office, and the fact that it is located on leased land.  The landowner has a lease agreement that calls for payments of $275,000 annually, that will kick in by 2025, making the city’s purchase unlikely in our view, unless the terms of the lease are bought out in the process.

THE OPEN FIELD NEXT TO SAFEWAY IS SOLD TO A LOCAL INVESTOR.    The large open field next to Safeway has been sold.  The 2.9 acre site which is located adjacent to the Safeway store and across from First Bank of Ketchikan closed in November.  This sale is the last large parcel in Vintage Park to be sold by the original development group that platted the Park in the early 1980’s.  Plagued by bad timing and competitor projects in the Airport and Lemon Creek areas, Vintage Park has nonetheless been the dominant office project in the valley, offering high “B” office space in several buildings for nearly fifty years.  No specific development plans have been  announced for the site.  The Carlton Smith Company represented the investor.

COMMERCIAL CONTRACTS ARE NOW SEEING THE ADDITION OF ESCALATION CLAUSES AS NEGOTIATING TERMS.   Since Juneau’s residential market has picked up speed, agents have gotten used to seeing “escalation clauses” used as a method for buyers to increase their chances of securing a purchase by establishing their maximum purchase price in what is called an “escalation clause”  These contract terms have long been used in other “hot” markets, but is relatively new in Alaska according to Anchorage Brokers.  But their use is a new phenomenon in commercial contracts.  They are being used more and more according to Carlton Smith, the only strictly Commercial Broker in Southeast.  “We see them used now in situations where the property being marketed is a rare commodity, and there is the expectation that multiple offers will be presented,” said Smith.  In these instances, buyers must be prepared to pay all cash as often multiple offers can bid the ultimate purchase prices above appraised values.

BICKNELL SUBDIVISION AT THE AIRPORT SEES SEVERAL LOTS REZONED TO GENERAL COMMERCIAL.  Effective in November, the Bicknell Subdivision at the airport saw several lots rezoned to General Commercial by the CBJ planning Commission.  The Commission effectively saw the need for more General Commercial land in the vicinity of the airport due to the fact that very little land that is zoned for business now exists in the Borough.  “What this will mean in the future is that new developments in the subdivision will have higher value uses such as retail and office,” according to Carlton Smith, listing agent for the subdivision.  Now under construction on the site is a new fleet fueling center and Convenience Store, and a retail/wholesale production facility for locally produced food products.  Two other new developments are soon to be announced.