WA State Department of Corrections
Moody's Aaa Credit | 8.00% CAP | Mission-Critical Use
Marketing description
Lee & Associates is pleased to present the opportunity to acquire a mission-critical, single-tenant office property in West Central Spokane, Washington, fully leased to the Washington Department of Corrections (WA DOC) through December 2030. The lease is fully guaranteed by the State of Washington, which maintains Moody’s highest possible Aaa credit rating, ensuring exceptional tenant stability and minimal credit risk. Occupied as an essential facility for community supervision, offender rehabilitation, and regional administration, the property benefits from the tenant’s long-term commitment to this specific location, supported by a firm 10-year lease term that provides investors with secure, predictable cash flow.
The asset stands out for its embedded growth potential and turnkey condition. Current in-place rents of $14.25 per square foot are approximately 21% below prevailing market rates, creating substantial mark-to-market upside upon lease renewal. A comprehensive renovation completed in 2021, with over $400,000 invested in interior, exterior, and mechanical system upgrades, minimizes near-term capital expenditure requirements and positions the property as a low-maintenance, high-quality holding.
Ideally situated in the heart of West Central Spokane, the location offers excellent accessibility to public transportation, courts, educational institutions, and social support services—features that directly align with and enhance the WA DOC’s operational mission—while providing ample on-site parking. Investors further benefit from Washington’s favorable tax environment, as the state imposes no personal income tax on rental income. This combination of investment-grade credit, significant rental upside, modern improvements, and a mission-supportive location makes the property an attractive option for investors seeking stable current returns with meaningful value-creation potential in the growing Spokane market.
Investment highlights
INVESTMENT GRADE TENANT:
The lease is guaranteed by the State of Washington, which has been assigned a rating of Aaa by Moody’s, the highest possible rating.
FIRM 10-YEAR LEASE:
Washington Department of Corrections (WA DOC) signed a 10- year lease through December 2030 demonstrating a long-term commitment to the property.
SIGNIFICANT RENT UPSIDE:
Current rent of $14.25/SF is 21% below market providing strong mark-to-market potential upon lease renewal.
MISSION-CRITICAL USE:
WA DOC facility for community supervision, offender rehabilitation, and regional administration which makes for exceptional tenant stability.
MAJOR RECENT RENOVATION:
$400,000+ renovation in 2021 upgrading the interior, exterior, and mechanical systems which minimizes near-term CapEx requirements.
KEY LOCATION:
Situated in the heart of West Central Spokane, this location ideally supports the tenant’s mission with ample parking as well as excellent access to public transportation, courts, educational institutions, and social support services.
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