By Jon Peterson
New York City-based The Blackstone Group has sold the four-building 422,000 square foot Willows Commerce Park in Redmond for $75.2 million, according to multiple sources aware of the transaction.
Blackstone declined to comment when contacted for this story. The seller was represented in the sale by the Seattle office of CBRE. The listing agents were Tom Pehl, senior vice president/director, and Lou Senini, a senior vice president of investment properties. CBRE declined to comment when reached for this story.
Los Angeles-based Kennedy Wilson is the buyer of the property. It did not respond to phone calls and emails for this story.
Blackstone had owned the Willows property since August of 2015. The property had been acquired as part of the real estate manager’s re-entry into the Seattle suburban office market. This property was part of a portfolio of 38 office buildings totaling 2.3 million square feet that were purchased as part of a global debt/equity platform that was bought from GE Capital Real Estate for $23 billion globally, and $3.3 billion across the Puget Sound region, as well as in Southern California and in Chicago.
When Blackstone had acquired the Willows, it had an occupancy in the mid 60 percent range. When the manager sold the asset, it was 97 percent occupied, as stated by sources that track the sale and leasing of suburban office assets in Seattle. The asset now is considered to be a core plus asset, given that it’s located in a suburban market with a very high level of occupancy.
This transaction is reflective of the strategy that Blackstone has with many of its assets. The real estate manager typically likes to acquire properties that offer the manager an opportunity to make improvements and lease up any empty space. Once this has occurred, Blackstone brings the property to the market for sale.
The real estate manager had purchased the Willows property for its close-ended commingled fund, Blackstone Real Estate Partners VIII. The capital raise for this commingled fund was concluded in April of 2015 at $15 billion. This investment fund looks at both buying individual assets and very large portfolios. The targeted returns for the commingled fund are a 15 percent net IRR.
