Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM Item No. 8d
ACTION ITEM Date of Meeting January 27, 2026
DATE : January 8, 2026
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 Innspace Term Lease
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute a term Lease Agreement
with Innspace, LLC at SeaTac Office Center (STOC) to lease 4,193 square feet of office space for a
term of 70 months.
EXECUTIVE SUMMARY
Innspace has been a tenant at STOC since 2023, they currently occupy 2,617 square feet on the
fourth floor of the South Tower (Suite 415). The Port has tentatively agreed to a new lease for
Innspace to relocate to a 4,193 square feet suite on the eleventh floor (Suite 1106) for an initial
term of 70 months. Prior to occupancy, Innspace will invest approximately $500,000 in tenant
improvements. In lieu of a tenant improvement allowance, the Port proposes to abate base rent
for the first 10 months (approximately $80,365 of value). The lease also includes two 2-year
renewal options, subject to Port approval.
Since acquiring STOC, the Port has experienced steady improvements in occupancy. This
proposed lease would further strengthen that trend, increasing the building’s occupancy rate to
approximately 90%. The transaction reflects continued demand for space at STOC.
JUSTIFICATION
Suite 1106 is due for refresh, with its last renovation completed in 2005, and would benefit from
significant upgrades toward Class A office standards. Innspace will fund and complete these
improvements without any reimbursement by the Port. Upon lease termination, at the Port’s
option, all improvements will remain with the Port, enhancing the long-term value of the space.
The lease begins at a base rent of $23.00 per square foot annually plus operating expenses, with
annual increases tied to CPI. Over the 70-month term, the lease is projected to generate
approximately $510,000 in revenue. Additionally, the suite Innspace would be vacating, Suite
COMMISSION AGENDA – Action Item No. 8d Page 2 of 3
Meeting Date: January 27, 2026
Template revised June 27, 2019 (Diversity in Contracting).
415, is in highly desirable condition and size, making it an attractive option for prospective
tenants. The lease will be executed using a lease form approved by Port Legal.
LEASE DETAILS
Effective Date Estimated to be February 1, 2026
Rent Commencement Date Earlier of Substantial Completion of Tenant Improvements
or November 1, 2026
Rental Rate Adjustments Beginning in month 25 of the lease, the Monthly Base Rent
will increase annually based on the Consumer Price Index
(CPI) and will continue to adjust every 12 months
thereafter.
Permitted Use Innspace, LLC shall use the Premises for general office use.
Security Requirement 6 months’ base rent
Insurance Requirement General Liability Coverage: $5 million per occurrence
Auto Liability Coverage: $1 million per occurrence
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Do not lease Suite 1106 to Innspace
Cost Implications: Risk losing $510,00 of rental revenue over the initial term
Pros:
(1) Suite 1106 would remain available for other potential tenants.
(2) Avoids immediate rental abatement and broker commission costs.
Cons:
(1) Innspace may choose to vacate STOC entirely if a long-term lease solution is not offered,
resulting in the loss of an existing tenant.
(2) The Port would miss the opportunity to have Suite 1106 upgraded, delaying potential
improvements and long-term value enhancement.
This is not the recommended alternative.
Alternative 2 – Enter into lease with Innspace for Suite 1106
Cost Implications: $510,000 of rent revenue over the initial lease term.
Pros:
(1) The Port would retain a STOC tenant under beneficial financial terms.
(2) The Port regains control of Suite 415, giving flexibility to strategically place tenants that
align with Port priorities.
COMMISSION AGENDA – Action Item No. 8d Page 3 of 3
Meeting Date: January 27, 2026
Template revised June 27, 2019 (Diversity in Contracting).
(3) Upon lease termination of Suite 1106, all improvements will remain with the Port,
enhancing the long-term value of the space.
Cons:
(1) Suite 1106 would be unavailable for other potential tenants.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
The proposed lease is expected to generate approximately $510,000 in rental revenue over the
initial 70-month term. The Port will incur a broker commission of $27,315 as part of this
transaction. Additionally, Suite 415, vacated by Innspace, is expected to be leased in its current
“as-is” condition, with no tenant improvement allowance provided, which helps reduce future
financial commitments.
When factoring in the 10-month rent abatement, base rental rates, and annual CPI-based
increases, the overall financial outlook of this lease remains positive for the Port, offering long-
term value through both revenue generation and capital improvements retained at lease end.
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.
