New York-based Clarion Partners closed on the purchase of 1621 North 34th Street in Seattle on Monday for $175,850,000, or approximately $823 per square foot, according to public records filed with King County. The building is the home to Tableau Software, the analytics and visualization technology company. The seller was Seattle-based Touchstone, which developed the roughy 210,000 square foot, four-story property that is across the street from Fremont’s Gas Works Park and with views of Lake Union and downtown Seattle to the south. Eastdil Secured was the listing broker on the transaction.
The building, which is referred to as NorthEdge by the developer, is a four-story technology building organized around a 38-foot-wide central outdoor courtyard and featuring floor plates up to 50,000 square feet, according to Touchstone’s web site. It was designed by Perkins + Will and built by Lease Crutcher Lewis. The building was completed in May of 2016.
According to SEC filings, Tableau signed an 11-year lease at the building in July of 2015 that was planned to commence in May of 2016 and go for a term of 132 months. Tableau paid $7.5 million for the first year following the twelve month abatement period from the commencement of the term and is subject to annual increases of 3 percent, according to the filing. At that amount, the per square foot rents in the first year were close to $36 per foot, which is well under the mid-$40 range that class A office space in Seattle may be able to fetch today, according to a recent Downtown Seattle Office report by Kidder Mathews. The company has the option to extend the term of the lease for up to two renewal terms of seven years each, provided that the rent would be subject to market adjustment at the beginning of each renewal term.
It is estimated that over 1,300 employees work at the property today.
There were two recent sales of similar Class A buildings in Seattle in the second quarter of 2017. They were the 345,000 square-foot Dexter Station building located at 1101 Dexter Avenue North, which sold to a joint venture between Tristar, RFT and Commerzbank, and 373,000 square-foot Midtown 21 located at 1007 Stewart Street, which sold to Union Investment. Dexter Station was sold by Stockbridge Capital and Capstone Partners for $286 million, or $826 per foot, and Midtown 21 was sold by Trammell Crow and MetLife for $330 million, or $884 per foot.
The Kidder Mathews report puts the Seattle market at 7.76 percent vacancy with around 7 million square feet under construction. Availability rate dropped to 10.58 percent as leasing activity continued, the report stated.
Photography courtesy of Touchstone.