Glendale, Calif. -based American Realty Advisors and its partners are the new owners of 2201 Westlake office building in downtown Seattle, and they paid a record amount to own it. The fully-leased, 12-story, 317,000-sqare-foot office building sold for $792 per square foot for a total of around $251 million. The seller was Vulcan Real Estate, who developed the building in 2009. The LEED Gold certified building is a home to several high-profile tenants including Amazon.com, PATH and Bang & Olufsen, among others.
Amazon occupies over half of the building, and the purchase includes the office and retail components of the structure. The Enso condominiums, a 135-unit mixed-use building was not part of this transaction.
The pricing reflects both the exceptional quality of the asset and the highly-desirable characteristics of the Seattle office market.
“Opportunities to acquire a newly-constructed building with high-quality tenants at a ‘Main and Main’ location are rare,” said Drew Hess, senior director, Investment Group for American in a statement. “This purchase secures a fully-leased Class A asset at an ideal location and still offers strong rental growth opportunities beyond an attractive risk-adjusted return.”
American Realty said they expect further rental growth from their latest purchase regardless of the fact that the asset is fully leased at the moment. The central location adds further value as the property is located at Westlake Avenue and Denny Way, on the border of downtown and the South Lake Union area.
Over $6 billion has been invested in the South Lake Union neighborhood in public and private infrastructure and development over the last few years, making this sub-market a top-tier location technology and life science companies.
“We were very pleased by the broad interest we received from institutional investors,” said Ada M. Healey, vice president of Real Estate for Vulcan Inc. in a statement. “The pricing reflects both the exceptional quality of the asset and the highly-desirable characteristics of the Seattle office market.”
American also owns several other assets in the Puget Sound region with an array of uses, including the Mural apartments, a 136-unit mid rise apartment building located at 4727 42nd Avenue SW. The investment manager for institutional investors has nearly $7 billion in assets under management, according to public documents, and is an active investor across the country.
It seeks best in class office properties, located in both the CBD and in-fill suburban areas with transit-oriented opportunities and strong industry demand drivers, according to its Web site.
Vulcan Real Estate has used the recent institutional investor interest and has in the last three years sold about $2.5 billion worth of assets, including the $1.5 billion sale of Amazon’s corporate campus to the Web retailer. The company is planning to re-invest the proceeds in further real estate projects in the region.
CBRE’s Kevin Shannon was the lead broker on the sale.