Wednesday, November 21, 2012

MetLife JV Buys Iconic Seattle Office Tower - Commercial Property ...

November 20, 2012

By Scott Baltic, Contributing Editor?

A joint venture comprising MetLife and an institutional real estate investor advised by Clarion Partners has purchased 1201 Third Ave., an Art Deco?inspired Class A building that is Seattle?s second-tallest office tower, from a partnership of affiliates of Wright Runstad & Co., Beacon Capital Partners L.L.C. and Shorenstein Properties L.L.C., the parties announced yesterday.

The sale closed on Nov. 2 and reportedly represents one of the largest single office building sales on the West Coast this year, though the terms of the transaction were not released. As previously reported by Commercial Property Executive <www.cpexecutive.com/cities/seattle/1201-third-ave-tower-nears-deal/>, estimates of the building?s value have tended to fall in the $500 million to $550 million range. Eastdil Secured represented the selling partnership.

The 55-story building features 1.1 million square feet of rentable office space and 33,000 square feet of retail, as well as six levels of below-ground parking. The high-rise, formerly known as Washington Mutual Tower, at present is reportedly about 20 percent vacant.

?The office market in Seattle?s central business district has demonstrated strong growth over the last several years, with demand for space focused on higher quality properties. We expect these trends to continue,? said Stephen P. Latimer, managing director and head of Clarion Partners? Seattle office.

1201 Third Avenue was originally developed by Wright Runstad in 1988 and holds a LEED Platinum designation and was awarded the ULI Award for Excellence. Wright Runstad, whose corporate offices are in the building, will continue to manage it on behalf of the new owner.

Beacon Capital Partners was also the seller in two Seattle-area Class A office transactions last July, involving City Center (497,000 square feet, sold to American Assets Trust for nearly $229 million) and Skyline Tower (417,000 square feet, sold to Kilroy Realty for about $187 million), both in Bellevue.

A third-quarter report from Cassidy Turley indicates that Seattle ranks fifth among office markets nationwide in volume of YTD investment sales, at more than $2.2 billion. The average price per square foot was $309.

And a similar report from Colliers International provides more evidence of the Seattle office market?s strength. Effective Class A rents in Seattle?s CBD climbed 2.57 percent from the second to the third quarter, from $30.32 to $31.10.

Despite an overall 12 percent vacancy rate, Colliers said, the Seattle office market is starting to shift in favor of landlords. Particularly when landlords can provide large blocks of contiguous space, tenants are seeing fewer concessions than they did six to 12 months ago.

Source: http://www.cpexecutive.com/property-types/retail/metlife-jv-buys-iconic-seattle-office-tower/

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