Item No.

8d_supp

Date of Meeting

October 28, 2025

Building 161E Renovation
Construction Authorization
October 28, 2025
Commission Meeting

SEA Cargo Program
1. SEA is the Pacific Northwest region's major hub for air cargo
2. In 2024, more than 460,000 metric tons of air cargo moved
through SEA, including international commodities valued in
excess of $26 billion
3. 14 cargo facilities at SEA total approximately 425,000 square
feet, mostly built between the 1970s and 1990s, and are at
100% occupancy
4. Many of the cargo buildings are older and have outdated
building systems that are beyond their expected lifecycles
2

Project Location

161E
Airport Vicinity Map

3

Project Scope
Building upgrades include:
1. Replacing warehouse and office heating and cooling
systems with higher efficiency system
2. Replacing underperforming and failing windows,
skylights, and doors
3. Upgrading existing lighting to LED fixtures
4. Improving restroom fixtures and finishes
5. Installing a means to control access to the building, and
6. Providing a new fire alarm panel and alarm devices
4

Existing Conditions
1. Building systems (heating and cooling, electrical, fire
protection, controls) are past useful life.
2. Windows, skylights, and doors are underperforming
relative to current energy standards or failing due to age
and condition.
3. Restroom fixtures and surfaces are aging, appearing
unhygienic and outdated.

5

Existing Conditions
Heating and Cooling
System
Exceeded Service Life
Natural Gas

6

Existing Conditions

Aging Skylights

Leak Water and Heat

7

Existing Conditions

1980 Windows

50%
Less Efficient
than today's models

8

Existing Conditions
Restroom Fixtures and Surfaces
Unhygienic
Water Wasting Fixtures

Inefficient or Broken
Water Heaters

9

Project Cost and Schedule
Cost Breakdown
This Request

Total Project

0

$3,098,000

Construction Phase

$10,891,000

$10,891,000

Total

$10,891,000

$13,989,000

Design Phase

Schedule

Construction Start: Q2 2026
Project in Use: Q3 2027

10

Financial Analysis
Project cost for analysis
Business Unit (BU)
Effect on business
performance (NOI after
depreciation)
IRR/NPV (if relevant)

$13,989,000
Airfield Commercial Cargo
NOI after depreciation will
increase
NPV $(1.0M)
NOI after debt service will be
negative between ($293K and
$10K) during 2028-2037.
NOI after debt service becomes
positive in year 13 (2038).

CPE Impact

N/A

Assumptions:
• 30 years analysis as that is estimated
asset useful life.
• The building is leased, and it generates
about $750K annual lease revenue.
• The base case is that the building won't
be leased to the tenants due to its
condition.
• 7.6% discount rate based on risk scoring.
• Annual debt service is around $1.2M
based on 5.25% interest rate.
• 3% annual rent increase due to inflation
and additional 10% annual market rent
increase attributable to renovation.
Business & Properties will need to
confirm with tenants to make sure this is
acceptable.

11

Project Cone of Certainty

We are here

12

Questions?

13