Bellevue’s Civica Office Commons towers, a two-building, 323,562 square foot Class A office complex in the heart of the Eastside city closed closed yesterday for $192.9 million, or just over $596 per square foot, according to public records. The owner was Hines, the Houston, Tex.-based REIT, which had owned the buildings since February of 2015, when it paid $205.1 million, or just over $633 per square foot, according the public records. While this particular asset may have sold at a loss, the transaction was part of a much larger asset disposition, which the company had been in the process of executing in 2016.
The buyer was a joint venture of Unico Properties and Boston, Mass.-based AEW Capital Management. “Civica was a trend-setting building in Bellevue when it debuted in 2001 and still stands as a premier office property on the Eastside, serving as a preferred location for an exceptionally high-quality collection of office tenants. Our goal is to enhance Civica’s already significant reputation in the market by delivering our best-in-class ownership and management approach, which prioritizes customer service and attention to the needs of our tenants,” said Andrew Cox, Unico Properties Vice President and Regional Director in a prepared statement.
The LMN Architects-designed structures feature a 45-foot glass enclosed lobby with onsite concierge services, retail, restaurants and a Starbucks store. The location of the two buildings in the close proximity to the heart of the Bellevue central business district, which has attracted such tenants as Wells Fargo, MetLife and Microsoft, among others.
The sale of this asset comes at practically the same time as Hines works to dissolve one of its investment vehicles, Hines Real Estate Investment Trust, Inc., which in July of 2016 announced that it would sell seven West Coast office assets in a cash transaction for $1.162 billion to an affiliate of Blackstone Real Estate Partners VIII. Three of those assets are located in the greater Puget Sound Area, and their sale information has not been recorded with the cities as of this publishing. Those assets are the Daytona-Laguna Buildings in Redmond, which are home to Honeywell and Microsoft; and 5th and Bell building in Seattle, which is occupied by Amazon.
Earlier this month, Hines announced that the dissolution sale had been completed. So far in 2016, Hines REIT has sold 22 of its directly owned properties for $2.3 billion, before transaction costs and retirement of debt. In addition, during that same time period, the Hines US Core Office Fund LP, in which Hines REIT owns a 28.8 percent LP interest, sold four of its properties for $762.7 million, before transaction costs and retirement of debt. Hines REIT is in the process of liquidating the few remaining assets it owns directly and through its interest in Hines US Core Office Fund LP and currently anticipates those sales will be completed before year-end.
“The sale of seven of our West Coast office assets to a Blackstone affiliate was a significant and positive transaction and a result of our focus on maximizing the assets’ appeal to the institutional market and providing Hines REIT’s investors with an attractive outcome,” said Sherri Schugart, President and CEO of Hines REIT in a prepared statement. “The vast majority of our investors will have experienced a positive return on their investment in Hines REIT given the cash distributions we have paid through the years combined with capital we expect to return to investors as a result of this liquidity event and capital we have returned in previous years. We are pleased with this performance relative to the performance of many of our peers and other investment alternatives that had comparable investment strategies and timing, especially considering the impact of the financial crisis and economic downturn during 2008 and 2009.”