Madison Plaza

www.colliers.com

Sam Wayne

Senior Vice President sam.wayne@colliers.com +1 206 351 7656

102 Madison Ave, Kent, WA 98032

The Offering

Photos

Location

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Investment Overview

Colliers Capital Markets Group, as exclusive advisor, is pleased to present Madison Plaza, a 157-unit core-plus opportunity with vacant ground-floor retail space in downtown Kent, Washington.. Built in 2022, the Property comprises five levels of wood-frame construction over two levels of podium parking, with modern finishes and limited near-term capital requirements.

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Demonstrated Operating Momentum with Further Upside

T12 operating expenses of $9,875 per unit include $3,102 of ground rent. Excluding ground rent, operating costs are $6,773 per unit, or 30.2% of gross revenue. The primary upside is revenue-driven and can be captured through three initiatives without additional capital. 1. Lease Up Existing Vacancy Economic occupancy improved from 86.3% on the T12 to 86.9% on the T3, with 92.0% underwritten in Year 1. Five signed leases increase physical occupancy from 84.7% to 87.9%, leaving 19 units available to lease. 2. Complete the Concession Burn-Down Concessions declined from 3.71% of gross potential rent on the T12 to 1.00% on the T3, a 271-basis-point improvement.

Program the rooftop patio on floor 3 with seating and landscaping. Re-open the resident lounge whichis currently used as storage Re-open the community gym whichis currently used as storage Upgrade machines in commonlaundry areas to accept credit card payment

Community Upgrade Ideas

$677,000 IN ANNUAL RENT UPSIDE ACROSS 87 CLASSIC UNITS

Caden Hughes

Associate caden.hughes@colliers.com +1 253 778 9270

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Property Location

157 UNITS EMBEDDED REVENUE UPSIDE

Site & Setting

Costco Outparcel: Positioned near a major highway interchange and in the shadow of a newly built Costco Low-density identity: The townhome format, landscaped streetscape, and walkable setting give Parkside a distinct residential feel that reinforces the demand that has kept the Property fully occupied. Parking: Dedicated surface parking with guest parking provides a practical amenity for residents seeking the convenience of home-style living.

Site & Setting

Chris Hardman

Senior Vice President chris.hardman@colliers.com +1 415 259 8241

Dylan Luxenberg

Associate dylan.luxenberg@colliers.com +1 253 973 5094

Reed Gustavsen

Senior Analyst reed.gustavsen@colliers.com +1 206 219 2377

Lender REO The construction lender took the property back in November 2023, more than a year after the developer delivered the building. Since then, institutional third-party management has cleaned up collections, burned off concessions, and pushed occupancy. The next owner gets the upside without the heavy lifting. Guidance of $242K Per Unit, Well Below Replacement Cost Podium construction in the south Puget Sound runs about $440,000 a unit today. At guidance, you're buying a 2022 building for roughly 55 cents on the dollar. Operations Headed the Right Way, With Room to Run Annualized T3 NOI is $75K above T12, with concessions declining from 3.7% to 1.0% of gross potential rent. In-place rents remain 4.9% below market, while one-bedrooms average $2.62/SF versus $3.05/SF at the comps. Year 1 NOI is underwritten $266K above T12 without renovation.

These three initiatives increase Year 1 NOI by $266K without additional capital.

3. Capture the Mark to Market In-place rents of $1,864 are 4.9% below underwritten market rents of $1,955. One-bedrooms comprise 68% of the units and average $2.62/SF, compared with $3.05/SF for similarly sized units at competing properties. The underwriting assumes no renovation program is required.

Tax Abatement Through 2031, No Affordable Units Five more years of MFTE with all 157 units at market rents. That's $1.7M of present value at a 6% discount rate, and Kent's Economic & Community Development plans to revisit RCW 84.14.020(6), a state law that allows a 12-year extension option with City approval. 94-Year Safehold Ground Lease With Freddie Debt in Place The ground lease runs through 2120 and was amended in 2024 to meet Freddie Mac requirements. There's a Freddie loan on it today, so financing isn't a question mark. Walk to Kent Station, No New Supply Coming Half a mile to Sounder, with direct rail to Seattle and Tacoma. CoStar shows zero market units under construction in the Kent submarket for five straight quarters, and less than 0.2% inventory growth projected through 2031.