By Jon Peterson
Urban Renaissance Group and its capital source from Chile is planning to place on the market for sale the 74,850 square-foot 500 Yale Ave. N office building in Seattle’s South Lake Union neighborhood. The price point on this space is projected to be around $54 million, or about $721 per square foot, as stated by sources familiar with the property.
The listing agent on the sale is the Seattle office of CBRE through its Capital Markets Office West team. CBRE declined to comment when contacted for this story.
Many of the newer and modern office buildings that have come up for sale in South Lake Union have been priced at over $100 million. The planned trade of 500 Yale will offer investors the ability to acquire a property at a much lower price point, given its size.
The office building was first developed in 2009. The property nearly entirely leased to WeWork with a lease that runs for an additional 14.5 years. This office building was the original Seattle location for the company, and it recently renewed and expanded its lease without any termination or contraction rights. The rental rate in the property is 22 percent below market rents. One of the reasons for this is that over the trailing 12 months lease comparables within the competitive set have increased by 13 percent.
The kinds of buyers that would be interested in 500 Yale would likely be core investors, a group that could include both domestic or international investors.
The office market in South Lake Union remains very tight. This region has a current vacancy of 1.1 percent with a total amount of vacancy around 75,000 square feet. The overall downtown Seattle market has a current vacancy of approximately 7.4 percent.
WeWork is a significant player in the office market in Seattle. It occupies a total of 1.1 million square feet in 13 different locations. It makes up for 64 percent of the total co-working space in the Seattle market, as stated by sources that track this information in Seattle.