Washington D.C.-based Madison Marquette purchased the Bay Vista Building, a 119,793-square-foot mixed-use tower, from The Carlyle Group for a little over $33.6 million, or $281 per square foot, confirmed a source familiar with the transaction.
According to Madison Mrquette’s Web site, Bay Vista has been repositioned as the dominant creative space destination for millennial users. Neither the buyer or seller were available for comment.
It’s really Amazon that is driving the Neighborhood
The property, located at 2815 2nd Avenue in Seattle’s Belltown neighborhood, is situated between Broad and Clay Streets. There is ground level retail below four stories of Class B office space at the base and a 24-story condominium tower. Over 90 percent of the building is leased at an asking rental rate of $26 per square foot per year, says the source. Some of the tenants are Seattle Bank, Board of Industrial Insurance Appeals, U.S. Equal Employment Opportunity, Welfare & Pension Administration and World Class Coffee.
The vacancy rate for Class B office space in Belltown is 7.2 percent, which is significantly higher than the 1.8 percent rate for Class A space in the area, shows Colliers International’s 2016 second quarter Seattle Statistical Office Report. However, this rate is lower than the average Class B vacancy rate for the city by 1.6 percentage points. Belltown’s average annual asking rate of $27.25 per square foot for the same type of office space is also lower than the average city rate by $3.13.
“I think the area offers a stable market,” said Sam Wayne, a senior research analyst for Colliers International in Seattle. “Outside of Amazon, many long term tenants are attracted to the lower rents. The submarket is not large, at around seven million square feet, and there isn’t a lot of new office product being proposed. It’s really Amazon that is driving the neighborhood.”
Residents of Belltown are either young professionals, working in either South Lake Union or the Central Business District, that want to have an option to walk to work, says Wayne. The neighborhood is in close proximity to the waterfront, which adds to its appeal. “There’s also a great restaurant and bar scene in Belltown that people are attracted to,” added Wayne. “I see it as being more convenient for residents.”
In 2014, Madison Marquette purchased Pacific Place, a 335,000-square-foot retail building for $271 million. Earlier this year, it acquired the Pacific Place underground parking garage for $87 million. Other properties in the Puget Sound that the real estate investment and management firm owns are Westwood Village, also in Seattle, Bellevue Connection, Everett Village Center and Issaquah Commons. “Madison Marquette is very active in the area,” said Wayne. “They’re making longterm plays, and I think they’ll continue to be a player here for a long time to come.”