By Jack Stubbs
Los Angeles-based BH Properties acquired in March a three-parcel property in Renton—which includes the Class A 199,168 square foot Federal Aviation Administration office building—for $13.8 million, King County records show. BH Properties, a commercial real estate investment company, acquired the property from FP-FAA Seattle LLC, an entity associated with Boston-based Spaulding & Slye Investments, a commercial real estate investment services firm. The transaction for the three-parcel property was recorded on April 23rd.
The seller is taking a significant hit on the property, which it acquired in 2011 for $35.25 million from Seattle-based Unico Properties.
Neither the buyer nor the seller responded to calls or emails for comment in time for the publishing of this story, and it is not yet clear what plans BH has for the three-parcel property.
According to public records filed with King County, in connection with the excise tax affidavit for the property, the buyer and seller entered into a third-party agreement for the purchase and sale of the property. The property was openly marketed by a third-party commercial estate brokerage firm in order to identify the grantee, and BH Properties was selected as the purchaser after the seller had received multiple offers for the property. According to public documents, the purchase/selling price for the property was agreed by the two parties, and does not reflect the King County assessed value.
The transaction in Renton was for a three-parcel property, according to public documents. The first parcel, located at 1602 Raymond Ave. SW., contains a 6,050 square foot Class C structure built in 1994. The second parcel, located at 1601 Lind Ave. SW., contains a 5-story office building that totals 199,168 square feet which, according to the property listing on Unico Properties’ web site, is the Federal Aviation Administration (FAA) building. The institutional quality office building, sitting on 8.8 acres and constructed in 1990, features state-of-the-art technology infrastructure, a full-service cafeteria, a childcare center and employee fitness center. The final parcel, located at 1650 Raymond Ave. SW., contains a 100,188 square foot commercial parking lot that sits on 2 acres.
The FAA building is approximately six miles to the east of Burien and two miles south of downtown Renton. The property is also roughly three miles from access to the intersection of Interstate-405 and I-5 and less than a mile from Washington State Route 167. Additionally, the property sits roughly three miles south of the edge of Lake Washington, where Seco Development is developing the under-construction 17-acre Southport office campus, which will include three 9-story buildings totaling 727,634 square feet of Class A office space. Southport is scheduled for occupancy in December 2018.
The FAA is currently in the process of moving its new regional headquarters from Renton to the 87-acre Des Moines Creek Business Park—located three miles south of SeaTac Airport—which is being built by Panattoni Development. The U.S. General Services Administration (GSA) and the FAA broke ground on the project in June 2016, and the undertaking is expected to be complete in spring 2018. The new 300,000 square foot office project, located at S. 216th St and 24th Ave. S in Des Moines, will allow the FAA to consolidate its Seattle-based workforce into a single-leased facility, where 1,600 employees will work, according to a statement released by GSA in 2016.
BH Properties, founded in 1977, owns, operates and repositions value-add real estate across the country. Across the U.S., the company operates 90 commercial and residential properties across 17 states that comprise 2,100 multifamily units and 9 million square feet of commercial office space, according to the its web site. BH Properties invests in industrial, office, medical, retail and hospitality properties and currently has assets in California, Nevada, Oregon, Texas and Washington, among other states. In terms of its acquisition strategy, the company looks for office properties totaling 25,000 square feet or greater, with transactions ranging from $5 million to $50 million.
Spaulding & Slye, founded in Boston in 1966, is a national investment firm that merged with JLL in 2006. The firm works with JLL to develop and manage its investments, and provides a variety of services including acquisition, development, financing and investment management.