By Jon Peterson
Chicago-based Walton Street Capital has paid $10.5 million or $70 per square foot to acquire a 150,000 square foot office/retail redevelopment site located at 701 Ninth Avenue in Seattle, according to a document from the Santa Barbara County Employees Retirement System.
Eric Mogentale, a partner with Walton Street in its home office, did not respond to phone calls seeking comment for this story.
It was stated in the pension fund document that the business plan for the project is to develop a six-story office building. There also will be ground floor retail that will include a grocery store. There is an existing building at the location presently that will be torn down.
Walton Street made its investment for its close-ended commingled fund, Walton Street Fund VII. Through the third quarter of last year, the commingled fund had a net asset value of $528.7 million. San Barbara County Employees had made a $7.5 million commitment into the commingled fund in May of 2012.
Fund VII is an opportunistic commingled fund that invests across the United States. The Pacific Region, which includes Seattle, Oregon and California, has the largest component of the fund’s portfolio. 30 percent of the portfolio is located in this region. Some of the other areas are 16 percent each in the Northeast and Southeast, 13 percent in the Mideast and 11 percent in the East North Central.
From a property type standpoint, office buildings make up 45 percent of the portfolio, 21 percent in hotels, 13 percent apartments and 11 percent in retail for the major property types.
The projected net IRR for Fund VII is 16 percent. The commingled fund was established to make debt and equity investments in real estate related assets and real estate operating companies through value-add and opportunistic investment strategies.