By Jack Stubbs
One of tech behemoth Amazon’s hubs in Bellevue has just changed hands.
On Wednesday, October 18th, New York-based TriStar Capital and RFR Holding purchased the Centre 425 building in Bellevue for $313, or roughly $877 per square foot, according to public records filed with King County. Tristar purchased the asset from Bellevue-based Schnitzer West, a property development and management company.
Built in 2016, the 16-story Class A office building is comprised of 356,909 square feet, according to the property listing on Schnitzer West’s website. Some of the on-site amenities include a rooftop and patio area, a conference center, locker rooms, bike storage and an outdoor covered deck. The building was designed by Seattle-based architecture firm NBBJ.
Located at 425 106th Ave NE, the asset is located inside Bellevue’s Central Business District and just two blocks from the Bellevue Transit Center. Additionally, the commercial property is approximately two miles from Interstate-405.
“100 percent leased [by Amazon] as of its opening in 2016, Centre 425 has become the premier office space in Bellevue’s CBD,” said Pam Hirsch, managing partner, Schnitzer West in a statement. “Its state-of-the-art design, select tenant roster and location make it a best-in-class investment opportunity. We look forward to continuing our relationship with Tristar Capital and RFR Holding.”
Newmark Knight Frank Capital Markets President, West Coast Kevin Shannon, Senior Managing Director Alex Foshay, Executive Managing Director Ken White and Managing Director Michael Moll were the transactional brokers for the sale.
“The Puget Sound marketplace, including Seattle and Bellevue, has arguably the strongest fundamentals of any office market in the nation. Capital has recognized this momentum and continues to pursue Class A trophy assets such as Centre 425 aggressively,” said Shannon.
Over the last several years, Bellevue has been a focal point for tech companies looking to expand their footprint. In August 2016, Valve signed an agreement to take nine floors of the Kemper Development’s Lincoln Square expansion. San Francisco-based Salesforce signed a lease for 75,000 square feet in the new 929 Office Tower, a project by Dallas-based Trammell Crow, which doubled its presence in the region and made it into the tech company’s largest engineering hub outside of its headquarters. Salesforce just recently upped the ante and added another 52,000 square feet in the same building, according to the third quarter of 2017 report by Broderick Group.
TriStar and RFR holding have worked on a number recent transactions in Seattle’s South Lake Union neighborhood, including the acquisitions of Amazon Phase VII and Dexter Station, which is occupied by Facebook. The companies paid $286 million, or just over $826 per square foot for the property occupied by the social media giant.
In January 2017, the companies purchased the 12-story 290,647 square foot Urban Union office building in Seattle’s South Lake Union Neighborhood from Schnitzer West for $268.9 million. Kevin Shannon, Ken White and Michael Moll from Newmark Grubb Knight Frank were the brokers on that sale.
According to a statement released to a number of media outlets, TriStar and RFR have now paid more than $1 billion to buy four office buildings totaling 1.3 million square feet in the last year, including two other Amazon-occupied offices in South Lake Union. The two companies said in a statement that they expect the strong local tech scene to continue to prop up commercial and residential real estate values locally.
Since its founding in 1997, Schnitzer West has developed roughly 7 million square feet of property in the Seattle, Portland and Denver markets, according to the company’s website. Developments include Class A core and suburban office spaces, flex and bio-tech space, luxury multi-family apartment, residential condominiums, mixed-use and luxury retail. Additionally, the company has acquired and repositioned approximately 2.8 million square feet of commercial product throughout the same markets, and it manages 4.3 million square feet of a variety of commercial assets. Some of the company’s current investments in the Puget Sound Region include Madison Centre, a 37-story office property in Seattle’s CBD; 901 Fifth, a 41-story project also in the CBD; and Bel Kirk 520, a 92,581 square foot property located along the Bellevue 520 corridor.