M-M Properties has acquired Sunset North Corporate Campus from Beacon Capital Partners for $155.2 million, according to public records. The campus, located in East Bellevue’s I-90 Corridor is anchored by Boeing Corp., which leased 144,073 square feet of office space in one of the campus’ buildings last year.
Sunset North Corporate Campus comprises of three buildings located in the Sunset Corporate Campus. Wright Runstad & Company and Equity Office Properties Trust developed two of the buildings in 1999 and a third in 2000. Of the 460,629 square feet of total office space, 151,037 square feet is currently available, according to listing broker Broderick Group.
“Downtown Seattle is much more lucrative for tenants, but there’s a lot going on in the Eastside as well.”
Boston-based Beacon Capital Partners is a private real estate investment trust (REIT) that has a nearly $30 billion portfolio in major metropolitan markets throughout the U.S. and in Europe. Other properties owned in the Puget Sound region include the Exchange and the Maritime Buildings in Seattle, and Lincoln Executive Center and Eastgate Office Park in Bellevue. Beacon Capital Partners was formed in 1997 after its public predecessor REIT Beacon Properties merged with Equity Office Properties Trust.
M-M Properties is a privately held Houston-based real estate investment firm that owns 36 million square feet of office projects and almost 17,000 multifamily units, with a total of approximately $8.6 billion in assets. Its only property in the Puget Sound is the newly acquired Sunset North Corporate Campus, however, it was a previous part-owner of the Exchange Building in downtown Seattle. The firm’s other assets are located in Texas and Florida.
Bellevue’s I-90 Corridor is a large area with an inventory of nearly 6.5 million square feet of office space, according to Cushman & Wakefield’s report, and is the second largest submarket in Bellevue, behind only the Central Business District (CBD). Its 9.8 percent vacancy rate is lower than the CBD’s current 12 percent, but quite a bit higher than Kirkland’s 3.3 percent. There is no construction underway at the moment, and office lease rates are the second highest in Bellevue, with an average asking rent for all classes of $33.08 per square foot.
“It’s up and coming,” said Brian Cagayat, a research analyst for Cushman & Wakefield. “Downtown Seattle is much more lucrative for tenants, but there’s a lot going on in the Eastside as well.”
According to David Otis, a JLL vice president, the I-90 Corridor is a much different submarket than other areas of Bellevue. Its location does not provide access to public transportation and the buildings are older, which makes it less ideal for attracting the Generation Y talent that many companies are looking to recruit. Nonetheless, several large tech companies have offices in the corridor, including Microsoft, Costco, Expedia and T-Mobile.