Template revised January 10, 2019.
COMMISSION
AGENDA MEMORANDUM
Item No.
8c
ACTION ITEM
Date of Meeting
July 28, 2026
DATE: July 10, 2026
TO: Stephen P. Metruck, Executive Director
FROM: Susie Archuleta, Senior Real Estate Manager
Jennifer Maietta, Director Portfolio and Asset Management
SUBJECT: WTCW - ALSAC/St Jude’s Term Lease
ACTION REQUESTED
Request Commission authorization for the Executive Director to execute the American Lebanese
Syrian Associated Charities, Inc. dba ALSAC St. Jude Children’s Research Hospital (“ALSAC/St
Jude”) term Lease Agreement at the World Trade Center West (“WTCW”), in its substantive form
for a term of 64 months with one 60-month option.
EXECUTIVE SUMMARY
ALSAC/St Jude’s is a not-for-profit corporation established to build awareness and raise funds to
support the operations of the St Jude Children’s Research Hospital, Inc. They will be a new WTCW
tenant, leasing approximately 4,000 square feet of office space.
Port Real Estate Policy RE-1 limits term agreements on Port property to a 60-month lease term.
This is a request for approval of a 64-month lease term followed by one 60-month option to
renew. The total costs associated with this request are $314,464.
JUSTIFICATION
The World Trade Center West building is comprised primarily of for-lease office space. Being a
highly effective public agency is one of the Port’s Century Agenda goals. That goal includes
financial stewardship. This lease increases WTCW total rental income. Furthermore, the terms
of this lease result in a cumulative net present value of $107K during the initial lease term.
The WTCW building is currently 45% occupied due to market conditions and waterfront
construction impacts. With the conclusion of the waterfront construction projects, WTCW has
seen an increased interest in leasing activity. Approval of this lease will enable staff to improve
the building’s overall occupancy rate.
DETAILS
ALSAC/St Jude’s is a not-for-profit corporation established to build awareness and raise funds to
support the operations of the St Jude Children’s Research Hospital, Inc. The mission of St. Jude
COMMISSION AGENDA – Action Item No. 8c Page 2 of 3
Meeting Date: July 28, 2026
Template revised June 27, 2019 (Diversity in Contracting).
Children’s Research Hospital is to fight childhood cancer by advancing cures, and means of
prevention, through research and treatment. Treatments at their hospital have helped push the
overall childhood cancer survival rate from 20% to 80%.
ALSAC/St Jude’s is relocating to WTCW from their former office in the South Lake Union
neighborhood. They will occupy the northernmost portion of the third floor, which has been
vacant since the previous full floor tenant vacated the third floor in August 2024. The lease terms
negotiated by Port staff reflect the current market conditions, which favor tenants. The primary
concessions extended to ALSAC/St Jude’s were a generous abatement period and tenant
improvement allowance. In exchange, Port staff achieved a market rent rate, longer than typical
lease term and an option to extend.
Port staff’s goals for the WTCW include maintaining a high occupancy rate and achieving market
rent rates. Execution of this ALSAC/St Jude’s office lease simultaneously increases WTCW
occupancy in pursuit of departmental occupancy goals and increases the WTCW total rental
income. The Seattle office market has been slow within the past few years with elevated vacancy
rates of approximately 28% in Q1 of 2026. This along with the closure of Alaskan way for the
Seattle waterfront construction projects (City of Seattle Protected Bike Lane and Elliott Bay
Connections pedestrian and bike paths) has negatively impacted the WTCW occupancy. Since the
completion of these projects in June 2026, there has been an increased interest in this building
resulting in this lease opportunity and several other month-to-month leases.
Key Lease Terms:
Premises 4,032 sf
Term
Initial 64 months
Option 60 months
Effective date Later of September 1, 2026
or construction permit date
Base Rent Rate $21.00/sf/yr NNN
Escalation 3.25%/yr
Abatement 6 months
Tenant Improvement Allowance $250,000
Broker Fees $22,128
Security Deposit (3 months’ rent) $31,884
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Do not enter into a lease with ALSAC/St Jude’s.
Cost Implications: None
Pros:
(1) Port saves $272,128 in upfront costs
Cons:
(1) No reduction in vacancy rate
COMMISSION AGENDA – Action Item No. 8c Page 3 of 3
Meeting Date: July 28, 2026
Template revised June 27, 2019 (Diversity in Contracting).
(2) Loss of $107K NPV revenue for first term plus any future revenue potential during
Option period.
This is not the recommended alternative.
Alternative 2 – Approve the ALSAC/St Jude’s lease with a 64-month initial term plus 60-month
option including 6 months of rent abatement and a $250,000 Tenant Improvement Allowance.
Cost Implications: $314,464
Pros:
(1) Provides a guaranteed tenant and lease term
(2) Attracts a high-quality tenant to the WTCW building, which is expected to help leasing
efforts for the remaining WTCW vacant spaces
Cons:
(1) Use of $250K for these tenant improvements vs other Port projects.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Annual Budget Status and Source of Funds
The tenant improvement allowance of $250K and broker fees of $22K will be funded by the
General Fund.
Financial Analysis and Summary
Rent Abatement, TI Allowance and
Broker Fees
$314,464
Business Unit (BU)
Portfolio & Asset Management
Effect on business performance
(NOI after depreciation)
This project will generate Total Cash Flow of $443K and
will increase the Net Operating Income by $420K for
the initial 64-month lease term.
IRR/NPV (if relevant)
NPV = $107K with payback period of four years.
CPE Impact
N/A
Future Revenues and Expenses (Total cost of ownership)
Approval of this lease increases rental income, reduces office vacancy and secures a high-quality
tenant to the WTCW for 64 months at market rent rates.
ATTACHMENTS TO THIS REQUEST
(1) Draft Term Lease
(2) Presentation
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None
