Artistic rendering of 526 Speedway exterior. (Mosaic Avenue Realty Ltd.)

Artistic rendering of 526 Speedway exterior. (Mosaic Avenue Realty Ltd.)

Mosaic Homes looks to add industrial condo space in Mukilteo

Mosaic Homes steps into commercial real estate development with 526 Speedway, an industrial condo project.

EVERETT — Industrial space for lease in Mukilteo and South Everett is becoming more expensive and difficult to find.

Vacancy rates are at an all-time low, hovering at about 3%. Meanwhile, rents have risen 15% or more in the last year, said Talor Okada, partner at NAI Puget Sound Properties.

Mosaic Homes, a builder that’s been constructing homes in the Pacific Northwest for more than 20 years, hopes to alleviate the crunch with a 66,000 square-foot industrial condominium project in Mukilteo.

It’s the first industrial condo project for Mosaic in the United States, a home builder based in Vancouver, British Columbia, Canada.

Called 526 Speedway, the project is located at 4301 78th St. SW in Mukilteo, a former vacant lot.

When completed next spring it will bring four industrial condominiums to market for purchase.

Each unit is about 16,000 square feet.

Like residential condominiums, industrial condos include an owners association and association fees, said Okada, project lead for 526 Speedway.

The association will be professionally managed by a management company to ensure that there are ample reserves for maintenance and other expenditures, Okada said.

Industrial condo owners typically share in the costs of common features, such as exterior landscaping and lighting, fire suppression system, parking lot and the building envelope which includes the roof and skylights, Okada said.

“Owning your space instead of leasing it allows business owners to build equity rather than servicing their landlord’s debt, Okada said. “And once the space is purchased, you’re able to forecast facility expenses much further out than a lease term.”

According to real estate experts, businesses considering whether to purchase a property should evaluate the pros and cons of ownership versus a lease term.

“An expanding or downsizing business demands flexibility in the size of its home. Leasing a property fits this scenario more than owning a commercial condo, where walls are fixed or bounded by other owners,” real estate agent Larry Westland wrote for the San Francisco Business Times.

A condo owner lacks the ability to negotiate with a landlord to make changes to the interior or relocate to a different space, Westland said. As a result, any improvements are on the owner’s ‘dime.’

On the upside, the purchase of an industrial condo offers a “stable, ‘base rent’ over a long period,” Westland said. “Beyond predictability, most entrepreneurs find it cheaper to own than to lease.

“There is, however, the added expense of ownership-association dues to help maintain the larger property,” Westland said. But the cost of interest expense, utilities, interior improvements and property taxes are an owner’s deductions to keep.

Mosaic is looking for other sites in the area that could support an industrial condo project of an even larger size, Okada said.

Mosaic is a co-founding partner of RISE Properties Trust, which has more than $2.8 billion of rental apartment assets under management throughout Puget Sound and Portland.

In the Vancouver, B.C., market, Mosaic has built over 6,500 homes and commercial spaces and has an active development pipeline of over $1.2 billion.

Janice Podsada: 425-339-3097; jpodsada@heraldnet.com; Twitter: @JanicePods.

Talk to us

More in Herald Business Journal

Logo for news use featuring Snohomish County, Washington. 220118
Business Briefs: State minimum wage rises in January

Also, Boeing workers’ donations support local nonprofits and fundraiser for businesses impacted by Bolt Creek wildfire.

Jollee Nichols, right, and daughter Ruby, 2, work on an art project together at the Imagine Children’s Museum on Wednesday, Oct. 26, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
With new addition, Imagine Children’s Museum doubles in size

More than just space, the Everett museum’s new $25 million wing is an investment in mental health.

Artistic rendering of 526 Speedway exterior. (Mosaic Avenue Realty Ltd.)
Mosaic Homes looks to add industrial condo space in Mukilteo

Mosaic Homes steps into commercial real estate development with 526 Speedway, an industrial condo project.

Andy Illyn with a selection of his greeting cards, Cardstalked, that are sold at What’s Bloomin’ Floral on Friday, Oct. 28, 2022 in Arlington, Washington. (Olivia Vanni / The Herald)
Adventure-seeking cop finds new thrill in greeting cards

Mukilteo assistant police chief Andy Illyn unwinds by turning puns and dad jokes into greeting cards.

Dan Murphy, left, Mary Fosse and Rex Habner. (BadgleyPhotography.com / Snohomish & Island County Labor Council)
Everett City Council member honored by local labor council

Mary Fosse, candidate for District 38, receives the first annual Mike Sells Labor Champion award.

Screen printed dish towels available at Madrona Supply Company on Saturday, Oct. 22, 2022 in Clinton, Washington. (Olivia Vanni / The Herald)
Do some good along with your Christmas shopping

Head across the Sound to Whidbey Island for gift-buying with a do-gooder spirit

Shoppers walk in and out of Macy’s at Alderwood Mall were Black Friday deals are being advertised on Thursday, Nov. 17, 2022 in Lynnwood, Washington. (Olivia Vanni / The Herald)
Go ahead, hit snooze: Most Black Friday deals are online

Braving the stores on Black Friday is still a thing, but more retailers are closed on Thanksgiving.

FILE - In this photo provided by the Washington State Department of Natural Resources, a crane and boats are anchored next to a collapsed "net pen" used by Cooke Aquaculture Pacific to farm Atlantic Salmon near Cypress Island in Washington state on Aug. 28, 2017, after a failure of the nets allowed tens of thousands of the nonnative fish to escape. A Washington state jury on Wednesday, June 22, 2022, awarded the Lummi Indian tribe $595,000 over the 2017 collapse of the net pen where Atlantic salmon were being raised, an event that elicited fears of damage to wild salmon runs and prompted the Legislature to ban the farming of the nonnative fish. (David Bergvall/Washington State Department of Natural Resources via AP, File)
State won’t renew leases for Puget Sound fish farms

Cooke Aquaculture has until Dec. 14 to wrap up steelhead farming and begin deconstructing their equipment.

Kevin Flynn, right, a meat-cutter with the Marysville Albertsons, hands a leaflet to a shopper during an informational campaign on Wednesday, Nov. 9, 2022. Flynn was one of about a dozen grocery store workers handing out leaflets to shoppers about the proposed merger between Albertsons and Kroger. (Mike Henneke / The Herald)
Proposed merger of Albertsons and Kroger worries employees

Workers at an Albertsons in Marysville urge shoppers to sign a petition blocking the $25 billion deal.

Kim Taylor, left, and Jeff Stoner co-own Greenbank Cidery, a newly opened taproom on Whidbey Island with eight varieties of cider on tap. (Rachel Rosen / Whidbey News-Times)
Cider tasting room opens on Whidbey Island

The owners of Greenbank Cidery have opened a tasting room in Coupeville. Eight varieties of cider are on tap.

Erika Heer, EVP, Chief Human Resources Officer at Coastal Community Bank
Quiet Quitting – the good, bad and what to do about it

Mid-summer, the term ‘quiet quitting’ became a part of the vocabulary of… Continue reading

Customers walk in and out of Fred Meyer along Evergreen Way on Monday, Oct. 31, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Store managers in Everett plead for help with crime, public safety

Two Fred Meyer stores report theft, drug use and threats, despite increased security and presence from Everett police.