Home Commercial AGM Acquires the Clover Building in Bellevue for $15.15MM

AGM Acquires the Clover Building in Bellevue for $15.15MM

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By Jack Stubbs

An office building north of Bellevue’s CBD recently changed hands.

On Tuesday, March 6th, the approximately 50,000 square foot Clover Building in Bellevue sold for $15.15 million, or roughly $303 per square foot, according to public records filed with King County. The buyer of the asset was Bellevue-based AGM Inc., a real estate services firm that specializes in commercial real estate and investment management. AGM acquired the property from San Francisco-based Swift Real Estate Partners, another real estate investment firm. The transaction was recorded on March 9th.

The seller had placed a value of $9.7 million on the Clover Building when it was acquired by Swift in 2015, according to a representative from the company. Some of the improvements made to the property included a new lobby and common area upgrades, including the addition of a gym and on-site cafe, and exterior improvements.

When Swift acquired the Clover Building in 2015, the company knew that one of the existing tenants in the property, a title insurance company, was going to be vacating the property, which would drop the vacancy in the building from 100 percent to 74 percent. When the property was sold, vacancy was around 84 percent, with leasing pending to bring it to 93 percent occupied, according to the company’s representative.
The property was sold at a 5.5 percent cap rate. This return is based on the property’s current net operating income. Swift had owned the property for its commingled fund, Swift Real Estate Partners Fund I and this asset was one of the first investments made by the company in the state of Washington.

Located at 14450 NE 29th Place, the three-story building sits on a roughly three-acre parcel of land adjacent to Washington State Route 520. The Clover Building totals 60,171 square feet, according to the property listing on loopnet.com, which indicates that there are currently 26,318 square feet of office space available across four different suites. According to Google Maps, the office building is currently occupied by computer consultant AIM Consulting, a commercial cleaning service company, and adaQuest, a business management consultant.

According to the report, some of the property highlights include the building’s proximity to Bellevue’s 520 tech corridor, Microsoft’s Campus (which sits 1.5 miles to the north) and the 520 Bike Trail. The office complex also includes a tenant lounge with Canteen Market and a workout facility, as well as covered and surface parking.

The Clover Building is approximately five miles to the northeast of Bellevue and is also less than a mile from Overlake Fashion Plaza, a 80,555 square foot shopping center across from Washington State Route 520. The property is also approximately three miles from access to Interstate-405.

AGM manages a variety of office, retail, medical and industrial assets. The company currently operates a Puget Sound region portfolio that contains more than 50 properties throughout Seattle, Auburn, Bellevue and Lynnwood, among other locations, according to the company’s web site. The company’s capture of the Clover Building adds to its already extensive collection of properties in Bellevue: AGM currently manages 16 properties in Bellevue, some of which include the Sherman Building, a 12,000 square foot office building in Bellevue’s Spring District; the roughly 10,400 square foot Top Foods Bellevue Corssroads Village; and the Heritage Corporate Center, a two-story office property that totals 52,376 square feet.

Founded in 2010, Swift Real Estate Partners acquires and repositions office and industrial assets in select West Coast markets, according to the company’s web site. The company identifies unique opportunities and executes well-defined business plans while providing real-time, day-to-day oversight for each investment, and offers a variety of investment management services including acquisition, financing, leasing, disposition and construction management, according to its web site.

The Eastside market has been active over the last several months. According to a fourth quarter 2017 Real Estate Market Review report written by Kidder Mathews, the Eastside office market ended 2017 with inventory totaling just less than 50.5 million square feet. The Bellevue CBD vacancy dropped to 7.6 percent from the 8.3 percent posted in third quarter 2017, but the CBD availability increased from 9.7 percent to 10.3 percent. The report also notes how rental rates in the suburban submarkets around the Bellevue CBD have been steady with the economy’s stable support of smaller businesses. In a new trend, older low-rise office properties northeast of the CBD are seeing pressure from strong pricing for townhomes, which are changing the highest and best use of those sites, according to the report.