Home Commercial Blackstone Closes on $540.35MM Acquisition of 800 5th Avenue Office Building in...

Blackstone Closes on $540.35MM Acquisition of 800 5th Avenue Office Building in Seattle

Seattle, Blackstone Real Estate Partners, Hines, J.P. Morgan Asset Management, Summit II, Bellevue, King County records, 800 5th Avenue
Image courtesy of Hines

By Jack Stubbs

On Friday, January 25th, New York City-based Blackstone Real Estate Partners acquired the 800 5th Avenue office building in downtown Seattle for $540.35 million, or approximately $578 per square foot, according to public documents filed with King County. The seller is a venture led by New York City-based J.P. Morgan Asset Management and Houston-based Hines as the operating partner.

Blackstone declined to comment about the recent transaction.

The recently-closed sale comes nearly two months after Blackstone was identified as the future owner of 800 5th Avenue. On November 30th, The Registry reported that the planned purchase price was $540 million, or about $578 per square foot.

Now that the acquisition has closed, Blackstone will place the property into its core plus open-ended commingled fund that goes by the name of Blackstone Property Partners, according to industry sources.

Built in 1981, 800 Fifth Avenue is a 42-story, 1.2 million gross-square-foot office building that includes 934,806 rentable square feet of office space, as well as 17,000 square feet of retail space and 612 below-grade parking stalls, according to Hines’ web site.

The exterior of the building is clad in a natural aluminum finish with a structural cross-bracing design and lightly tinted gray glass. Also featuring a landscaped public plaza, the building’s exterior is wrapped in a natural aluminum finish with a structural cross-bracing design and lightly-tinted gray glass.

The sellers of 800 Fifth Avenue had gone through a $46 million renovation of the asset in 2017, according to published reports. The renovation work on the property included fixing up some of the interior space and improvements to the bathrooms and elevators. Some of the major tenants in the property include Bank of America, Princess Tours, Providence and Regus, according to the seller’s web site.

The property occupies a prominent location in Seattle’s downtown core, bounded by 5th and 6th Avenues and Marion and Columbia Streets.

Blackstone aims to to generate attractive risk-adjusted returns for its investors across cycles and over the long term. The company aims to acquire high-quality investments at discounts to replacement cost, then improving the properties through hands-on management and targeted value-add initiatives, according to the company’s web site. Blackstone’s portfolio spans asset types that include office, retail, hotel, industrial and residential properties. Blackstone is the largest real estate private equity firm in the world today with $120 billion of assets under management.

The company was last active in the Puget Sound region in mid-October, 2018. On October 18th, Blackstone acquired the 142-room Hampton Inn & Suites hotel in Federal Way for $33.5 million, or approximately $235,915 per room, from Royal Hospitality LLC.

Founded in 1957, Hines is a privately-owned global real estate investment firm that has a presence in 207 cities across 24 countries, according to the company’s web site. Hines has approximately $116.4 billion of assets under management, including $64 billion for which Hines provides fiduciary investment management services, and $52.4 billion for which Hines provides third-party property-level services.

On October 23rd, 2018, Hines, announced that permits for the development site Summit III in Bellevue, which is a 17-story, 370,000-square-foot Class A office tower in the region’s growing Eastside city, have been issued.