By Meghan Hall
An agreement for yet another large ground lease has been struck, part of a new emerging trend across the Puget Sound. In a deal that closed on Monday, San Francisco-based Spear Street Capital and an entity affiliated with Christopher Quiett and GLL Real Estate Partners struck a $65 million agreement for a ground lease at the Watershed Building in Seattle.
The building is located at 900 N 34th Street in Seattle. Rising seven stories, the building totals roughly 66,000 square feet. The building also features 5,777 square feet of retail at grade, as well as outdoor patio and deck space on levels one, two, four and seven. Floorplates range from 6,000 square feet to 12,000 square feet.
The building, a collaboration between Hess Callahan Partners, Mark Grey and Spear Street Capital, was completed in 2020. The building was designed by Weber Thompson and features electrochromic glass that automatically tints, state of the art building controls, locally sourced materials, among other features.
“Watershed is one of Seattle’s most sustainable buildings intended for high-tech office use, showcasing cutting-edge design with seamless integration into the vibrant Fremont neighborhood,” the property’s website states. “The building fulfills ambitious sustainability measures that protect Seattle’s watersheds, reduces building energy usage and is built with responsibly sourced and salvaged materials.”
The property’s website indicates that floor two, as well as floors four through seven, have been leased. Floor three, totaling 6,017 square feet, is available, as is space on the first floor. Weber Thompson moved its offices from the Terry Thomas Building to the second floor of Watershed, and Private Division, a video game company, has also taken space in the building.
A number of significant ground leases have been solidified across the Puget Sound in recent months. In July of 2021, Brookfield executed a $263.5 million ground lease for Bellevue’s Spring District Blocks 16 and 24. Sources familiar with the deal have stated that Chatham Financial acted on behalf of USQ Special Situations in the agreement.
In another deal, Hilco spent $16.55 million to acquire access to land beneath a JCPenney in Tukwila, Wash. The 255,534-square-foot department store is located at 1249 Southcenter Mall. Most recently, LPC West and Intercontinental closed on a 50-year ground lease in Seattle’s U-District. The ground lease will allow the companies to build a Class A, 266,000 square foot building at 4328 BRooklyn Ave. NE. Combined, the ground leases show that the strategy is becoming increasingly popular with developers and investors, a trend which could shape the local commercial real estate market.