By Jon Peterson
Boston-based Beacon Capital Partners has put its acquisition of the 140,000 square foot Maritime Building located at 911 Western Avenue in Seattle into the company’s latest investment fund, Beacon Strategic Capital Partners VII.
A company representative at Beacon declined to comment at this time when contacted for the story. The acquisition price on the property was $13.1 million, according to published reports. Beacon does have a regional office in Seattle located at 701 5th Avenue, according to the company’s Web site.
This size of the deal and the property is much smaller than want Beacon is typically known for buying for its investment funds. One example of this was the 622,487 square foot office building located at 515 North State Street in Chicago that the fund has acquired. According to published reports, the acquisition was for $225 per square foot or $140 million.
The Maritime Building is the only Seattle asset in Partners VII at this time. Beacon has acquired a total of seven properties for the commingled fund. These assets are two each in New York City and Chicago and one each in Seattle, Boston and Glendale, Calif. Six of the seven deals were sourced off-market. These properties make up for roughly 1/3 of the commingled fund.
Beacon toward the end of last month completed its capital raise for Partners VII. The total equity raise amounted to $1.38 billion, according to sources that track this information. Two of the major investors in the commingled fund are the California State Teachers Retirement System and the State of Wisconsin Investment Board. Each of these investors made a $150 million commitment to the fund.
The commingled fund only makes value-add investments in office buildings. Most of the capital will be invested in the major markets in the United States. Beacon looks to invest in properties located in certain markets where assets can be transformed through forward-looking capital improvements that will appeal to a broad mix of tenants.
Beacon typically contributes significant co-investment capital to its commingled funds. For instance, in its Partners VI fund, the manager placed $100 million of its own capital into the fund. The targeted gross IRRs for Partners VII will likely be somewhere in the range of 18 percent to 20 percent.