Home Commercial Digital Realty Acquires Additional 49% Stake in Seattle’s Westin Exchange Building, Valuing...

Digital Realty Acquires Additional 49% Stake in Seattle’s Westin Exchange Building, Valuing Asset at $305MM

Digital Realty, Westin Exchange Building, Clise Properties, Broderick Group
Image Courtesy of The Westin Exchange Building

By Meghan Hall

Since its completion in 1980, Seattle’s Westin Building has served a wide variety of tenants, and for 32 years acted as a carrier hotel for The Westin while also operating systems such as the Seattle Internet Exchange and Northwest Giga PoP. Now, one of the building’s long-time owners, Digital Realty, which had purchased 49 percent of the building in 2006, has struck a deal to acquire an additional 49 percent stake in the property, according to a second-quarter of 2020 commercial real estate industry report by the Broderick Group. In a transaction that likely closed in June of this year, Digital Realty’s purchase valued the property at $305 million, or about $760 per square foot. The seller was Seattle-based Clise Properties, which maintained two percent share ownership of the property, according to Broderick Group.

Located at 2001 6th Ave., the building totals 401,544 square feet. To date, 70 percent of the building is occupied by telecom companies, according to the Westin Exchange Building’s website.

The sale was one of the few—or significant—property transactions of the second quarter. According to Broderick Group, there are several other downtown buildings up for sale, including Skanska’s 2&U, as well as 200 Occidental, owned by Urban Visions and located in Pioneer Square.

While Broderick Group notes that office activity has slowed in the Puget Sound over the past quarter, the region’s strong fundamentals heading into the current market correction will allow the Puget Sound to remain relatively stable moving forward. Many tenants with large space requirements are still actively in the market, and those who held off during the second quarter will move forward with deals in the coming months. Overall, the brokerage firm anticipates that Seattle will remain a landlord-favorable market, a positive for investors like Digital Realty.

The Seattle Westin Building data center is built to seismic zone 3 standards with a seismic retrofit completed in 2007, according to a report by Cloud and Colocation. The building provides amenities like a reservable conference room with a view of Puget Sound on the 16th floor, convenience store on the 3rd floor, soup and sandwich cafe on the 1st floor, as well as a barbershop. The neighborhood amenities include a four-star hotel, a light-rail station with direct access to SeaTac International Airport and walking distance to many important places. The building has 400 secure, covered parking spaces, stated the report.

As of this writing, Clise Properties had not yet returned The Registry’s request for comment.