Developer to buy Associated Grocers' 55-acre hub in South Seattle

Associated Grocers said Friday it agreed to sell its 55-acre Seattle headquarters and food-distribution hub to Sabey Corp., known locally for redeveloping old buildings.

The site, just south of Boeing Field between Interstate 5 and East Marginal Way South, is believed to be the largest piece of Seattle property to go on the market in recent years.

Associated Grocers (AG) said its board of directors voted unanimously to accept Sabey's offer pending finalization of the terms, which were not disclosed.

The 73-year-old company put the site up for sale in December, seeking to cash in on its price appreciation. Associated Grocers plans to lease the site back from Sabey while it looks for a new home, a process that could take up to four years.

Local real-estate experts said the site probably is selling for more than $85 million.

"It's got a lot of value to it, and Associated Grocers knew it," said Brian Dennehy, a broker at Grubb & Ellis.

Added Robert Aigner, a senior vice president at Harsch Investment Properties, which did not bid on the site: "The kinds of numbers I heard being kicked around were in the stratosphere."

Aigner said he could see the site eventually being redeveloped into a corporate campus for a large company.

Jason Rosauer, a broker at GVA Kidder Mathews who represented Associated Grocers in the sale, said the property had attracted "significant interest throughout the country and worldwide."

Tukwila-based Sabey recently redeveloped part of the old Providence Hospital on First Hill into a biotech research center. It also plans to redevelop the original Rainier Brewery site in Seattle's Georgetown neighborhood. Founder David Sabey originally made his mark putting up Boeing buildings in the South End.

The company isn't talking about its plans for the Associated Grocers site.

"They didn't buy it for any specific development plan," said Sabey spokesman Jim Kneeland. "It was just a great piece of property. You don't find 55-acre parcels with freeway access that close to downtown Seattle very often."

Associated Grocers supplies independent grocers and supermarket chains in Washington, Oregon, Alaska, Hawaii, Guam and the Pacific Rim.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com