COMMISSION AGENDA MEMORANDUM ACTION ITEM Item No. Date of Meeting 8d November 18, 2025 DATE: October 20, 2025 TO: Stephen P. Metruck, Executive Director FROM: Blaine Burk, Aviation Real Estate Portfolio Manager III Jason Johnson, Assistant Director Airline Affairs & Aviation Properties SUBJECT: STOC AARP Lease Amendment ACTION REQUESTED Request Commission authorization for the Executive Director to execute a Lease Amendment with AARP at SeaTac Office Center (STOC) to remove 2,195 square feet of office space from their leased premises. EXECUTIVE SUMMARY AARP has been a tenant at STOC since 2016 and currently leases 9,034 sf of office space located on a portion of the 3rd and 11th floors of the South Tower. Due to underutilization of space, AARP has requested to relinquish the portion of their leased premises on the 3rd floor, totaling 2,195 square feet. AARP's lease for the 3rd floor space is currently set to expire on February 28, 2030. Following negotiations, the Port has tentatively agreed to remove the space from their leased premises and AARP will pay the Port a fee of $149,792.41 to vacate the space early. The termination will be effective as of December 31, 2025. The Port has already received interest from prospective tenants for the vacated space, with potential new occupancy expected as early as Q2 2026, minimizing downtime. JUSTIFICATION The 2,195 square feet the Port would be allowing AARP to vacate early is in desirable condition and size, making it attractive to prospective tenants. Although the space is currently unused by AARP, several businesses related to airport operations have already expressed interest. The Port anticipates re-leasing the space as early as Q2 of 2026. Financially, the early termination is protective of the Port. The termination fee constitutes approximately 22 months of AARP's base rent and operating expenses associated with the relinquished space through the remaining term of the Lease, and through active marketing of the space and a strong chance to attract a replacement tenant for the space within the next several months, the Port has appropriately protected its financial interests and stands to benefit from the opportunity to bring in a new, active tenant to the STOC property. As part of the termination, AARP will remove all furniture, Template revised January 10, 2019. COMMISSION AGENDA - Action Item No. 8d Meeting Date: November 18, 2025 Page 2 of 3 fixtures, and equipment (FF&E) in accordance with the terms of its current lease. The Lease Amendment will be executed using forms approved by Port Legal. LEASE AMENDMENT/TERMINATION DETAILS STOC AARP Lease Amendment Tenant Name AARP Space being removed from 2,195 SF (Suite 315) Lease Removal Date December 31, 2025 Fee $149,792.41 Fee Due Date 30 days' following removal date FF&E AARP will remove all furniture, fixtures and equipment in accordance with the terms of its current lease ALTERNATIVES AND IMPLICATIONS CONSIDERED Alternative 1 - Do not remove the 2,195 SF from AARP's lease Cost Implications: Continue to collect rent/operating expenses from AARP through 2/28/2030 Pros: (1) (2) The Port would receive assured payments for rent and operating expenses throughout the duration of the lease. The Port would avoid any transactional costs to re-lease the space. Cons: (1) (2) The space would be underutilized by AARP, resulting in inefficient use of the property The Port would forgo the opportunity to lease the space to an airport-related tenant This is not the recommended alternative. Alternative 2 - Remove the 2,195 SF from AARP's lease Cost Implications: Collect termination fee of $149,792.41 and re-lease the space to another tenant Pros: (1) The Port regains control of the space earlier (by end of 2025), giving flexibility to strategically place tenants that align with Port priorities. The Port expects to re-lease the space as early as Q2 2026. Template revised June 27, 2019 (Diversity in Contracting). COMMISSION AGENDA - Action Item No. 8d Meeting Date: November 18, 2025 (2) Page 3 of 3 (3) The Port would collect a substantial fee for early termination of the space. This provides immediate financial benefit, even before a new tenant is secured. The lease termination avoids 5 more years of inefficient use of the space. Cons: (1) (2) The Port risks the space remaining vacant until a new tenant is found. The Port may incur extra costs, such as broker commissions, to lease the space again. This is the recommended alternative. FINANCIAL IMPLICATIONS As part of this agreement, the Port will collect a termination fee of $149,792.41. The Port expects that any future tenant occupying the vacated space will accept it in its current condition (As-Is), with no Tenant Improvement allowance provided. The Port anticipates incurring a broker commission of approximately $15,000 to $25,000 to secure a new lease for the space. ATTACHMENTS TO THIS REQUEST (1) Presentation slides PREVIOUS COMMISSION ACTIONS OR BRIEFINGS October 22, 2024 - The Commission authorized the acquisition of STOC and the assumption of all STOC leases. Template revised June 27, 2019 (Diversity in Contracting).