By Meghan Hall
Brookfield Properties, one of the world’s largest real estate managers, is diving back into the Puget Sound market with a major purchase. In a transaction that closed this week, the New York-based firm purchased Bellevue’s Block 16 for $365 million, or about $1,062 per square foot. The property was sold by Eastdil Secured on behalf of San Francisco-based Shorenstein Properties, Seattle-based developer Wright Runstad and institutional investors advised by J.P. Morgan Asset Management.
“The Spring District is a leading example of a sustainable community that provides a true balance of live, work and play,” said Andrew Friedman, managing director at Shorenstein in a statement. “This sale underscores just how desirable this type of asset has become for global investors.”
The building, located at 1227 124th Ave. NE and is currently 100 percent leased to Facebook. Facebook’s lease is expected to run through June 2033, but the company has renewal options totaling an additional 12 years. The property has 316,009 square feet of office space on levels two through 11, plus 12,807 square feet of retail space on level one, for a total building footprint of 311,233 square feet. The development also comes with about 900 parking spaces.
Block 16 sits at the gateway to The Spring District. Situated along the Bellevue-Redmond Corridor, it is one of the most active, under development areas of the Eastside at the moment. The area will be developed into a mixed-use urban neighborhood over the course of three phases. The first phase, which began in 2017, will include 805 residential units, six office buildings, Brewpub, an urban park and buildings for both GIX and REI. When entirely complete, there will be 3.8 million square feet of office and street level retail, 1,100 residential units and a 209,000 square foot hotel. The office, retail, residential and hotel space combined will total nearly 5.3 million square feet.
Within the Spring District, Facebook has also leased Block 6, which totals 325,000 square feet, and Block 24, which totals 200,000 square feet. Facebook intends to move into both buildings by 2023.
“The Spring District has become a choice location for high quality office tenants in Bellevue,” said Greg Johnson, CEO of Wright Runstad. “Further expansion of The Spring District includes two more large scale projects that will add another 530,000 sq. ft. of office space by 2023, and there is even more in the pipeline.”
In September of this year, Facebook continued to add to its Spring District footprint, closing on a deal for REI’s headquarters for $390 million, setting the stage for the potential sale of Block 16. The REI building totals 400,000 square feet, and the transaction also included six acres of land.
As the end of 2020 years, local brokerage firm Broderick Group anticipates that sales will pick up and deals will close in a “flurry” of activity. A recent report from the firm states that every asset on the market continues to garner “significant” activity as both individual and institutional investors are willing to overlook the short-term hurdles posed by COVID-19 for long-term, stable investment.