By Jon Peterson
Los Angeles-based CBRE Global Investors has paid $272 million or $385 per square foot to acquire the 708,283 square foot Metropolitan Park East and West office portfolio in Seattle, according to sources familiar with the transaction.
CBRE Investors declined to comment on the sales price for the transaction. This transaction was acquired for a commingled fund run by the manager. It represents the first deal completed by the buyer in the Seattle market for its value-add commingled fund series.
“We believe that Seattle is a very strong market to own office assets in. The market has been showing good levels of growth, and we are a believer in the market going forward,” says Phil Hench, a principal for CBRE Investors.
The seller of the portfolio was Brookfield Office Properties based in New York. The listing agent on the sale was Eastdil Secured out of its San Francisco office.
There is a value-add component to the properties even though the properties are currently 93.6 percent occupied. “30 percent to 40 percent of the space in the properties will come up for renewal in the near term over the next one to three years. This should enable us to create some additional value in the assets in the future,” said Hench.
The 20-floor Metropolitan Park East is located at 1730 Minor Avenue and totals 370,849 square feet. Metropolitan Park West is a 337,434 square foot asset. This 18-floor property is located at 1100 Olive Park Way. Both properties are leased to a diverse group of tenants.
CBRE Investors will continue to look for additional assets in the Seattle market. This would include office buildings and a mix of the other major property types, as well.
The Metropolitan portfolio is located within the South Lake Union submarket of Seattle. Over the past several years this sub-market has shown very strong improvement. Since 2010, the submarket has achieved one million square feet of net absorption and the vacancy in the area has dropped from 14.7 percent to 8 percent.
The South Lake Union has a total inventory of 6.5 million square feet through the first quarter of this year, according to data from the Seattle office of JLL.