By Meghan Hall
After closing in a number of dispositions across the Puget Sound during 2020, Healthpeak is reinvesting once again in the Seattle market. In a deal that closed on October 8th, Healthpeak acquired the Northwest Kidney Center in Seattle for $42.5 million, or about $1,086 per square foot. The seller of the asset was Northwest Kidney Centers itself, which operates as a Washington nonprofit corporation.
JLL’s Gerry Rohm, Logan Greer and Evan Kovac had been marketing the property for sale on behalf of Northwest Kidney Centers.
The asset is located at 700 Broadway and 920 East Cherry St. Of the two parcels that traded, the first is developed with a 39,115 square foot office building originally constructed in 1963. The building sits on about 0.6 acres of land. The second parcel, off of Cherry Street, is a 0.15 acre lot currently used as parking. The property recently underwent a $7.6 million renovation back in 2012 and a garage resurfacing in 2017.
“As a long-time advisor and partner of Northwest Kidney Centers, we are very grateful the sale of 700 Broadway was such a success as it paves the way for a new chapter for the organization in Seattle,” said Jake McKinstry, principal of Spectrum Development Solutions.
Northwest Kidney Centers was first founded in 1962 in Seattle as the world’s first dialysis organization. The company, according to its website, provides around 285,000 dialysis treatments per year for more than 1,800 patients. The center became the first U.S. dialysis center to treat those who had the novel coronavirus.
In all, the organization operates 19 clinics in the area and invested more than $30 million in capital projects during 2020. The organization’s total revenue came to $138 million at the end of last year, according to reporting by the company.
The property was marketed as a development site with the ability to deliver 264,000 square feet of life science or medical office space, according to a marketing flyer by brokerage firm JLL. However, upon the sale of the building, Northwest Kidney Centers intended to execute a 24-month lease-back on closing. This, according to JLL, will provide a new owner like Healthpeak the ability to maintain cash flow through the entitlements process.
“The sale of Northwest Kidney Centers facility at 700 Broadway marks a significant milestone for the organization,” said Rebecca Fox, Northwest Kidney Centers’ CEO. “As part of our long-term strategy to consolidate our downtown operations, it will enable us to further invest in our mission to promote the optimal health, quality of life and independence of people with kidney disease.”
The asset is not far from a number of prominent hospitals and medical centers, including Swedish Medical Center, Virginia Mason Hospital, UW Medicine Harborview, and others. More than six million square feet of outpatient and medical office exists within the neighborhood, and such space currently has a 97 percent occupancy rate.
How Healthpeak will proceed with the property is unclear. In 2020, the REIT sold off a number of Puget Sound assets, specifically senior living facilities, to various buyers. In December of 2020, Healthpeak sold three Aegis Living facilities for $132.5 million to Cephas Partners.And, at the beginning of the year, Healthpeak sold its Sunrise of Edmonds and Sunrise of Mercer Island communities for about $28 million to Brookfield.