By Jack Stubbs
The office market on the Eastside has been active over the last several weeks, and Atlanta-based Invesco recently acquired the Microsoft-occupied six-building office campus portion of the Redmond Town Center for $268.4 million, or approximately $453 per square foot, according to public records filed with King County. Invesco acquired the six-building property from San Francisco-based Shorenstein Properties, a commercial real estate owner and investor. The transaction was recorded on June 20th.
Shorenstein acquired the office campus from California-based Macerich for $185 million in July 2013.
Public records indicate that the transaction between Invesco and Shorenstein included two of the office buildings—a 5-story structure built in 1998 totaling 134,076 square feet and a 4-story structure that totals 120,324 square feet—in the larger campus. However, public records also list six addresses (16221, 16331, 16661, 16771 NE 72nd Way; 7277 164th Ave., NE and 7332 166th Ave. NE), which correspond with the six-building office campus portion of the Redmond Town Center. The buildings were constructed in the late 1990s, from between 1997 and 2000, according to Shorenstein’s web site. They are between three and five stories tall with floor plates between 18,000 and 30,000 square feet.
Technology giant Microsoft, whose headquarters is just three miles to the south of the property, in recent months expanded its presence in the Redmond Town Center. On February 1st, 2018, Shorenstein leased Building 3, a three-story, 85,876 square foot building located at 16221 NE 72nd Way, to Microsoft. The building was occupied by AT&T until the company’s lease expired at the end of 2017. Microsoft also occupies buildings 4, 5 and 6 of the Redmond Town Center, and the company recently renewed the leases in these buildings on a long-term basis, which speaks to the strength of the property’s location and the firm’s strong belief about the benefits of this location, according to sources with direct knowledge of the transaction.
The six-building, 592,000 square foot Class A office complex is part of the larger 1.3 million square foot Redmond Town Center, a mixed-use lifestyle center. In addition to the center’s restaurants, retail and lifestyle amenities, the property faces the Bear Creek Trail, a half-mile segment of pedestrian and bike trail, which connects into a four trail system of walkways looping around the city of Redmond, according to Shorenstein’s web site. The property is located just a half-mile from Redmond Transit Center, which provides transportation options to locales throughout the Puget Sound region, and three miles from Microsoft’s campus.
Global real estate company Invesco’s capture of the office campus follows hot on the heels of another sizable transaction that recorded today on June 20th, when Microsoft acquired the nine-building Daytona Laguna office campus—right across from its current headquarters—for $250 million, or approximately $345 per square foot from New York-based investment firm Blackstone Group.
Invesco’s acquisition of the Microsoft-occupied office portion of Redmond Town Center signals its intention to expand its presence in the Puget Sound region. In October 2015, the company acquired the six-story, 150,000 square foot 1101 Westlake project for $67.4 million from Holland Partner Group. Facebook now occupies the office building in South Lake Union—which the company unveiled in mid-March, 2018—and will provide room for 900 additional employees.
Shorenstein, founded in 1924, is one of the country’s oldest real estate organizations and is active nationally in the ownership and management of high-quality office and residential properties, according to the company web site. The company’s current portfolio totals 21.3 million square feet in 16 markets across the country and has a gross value of $7.1 billion.
The company’s Puget Sound region ortfolio also includes the Spring District project in Bellevue, a 36-acre site that is entitled for 5.3 million square feet of office space, multifamily residences, retail, hotel uses and open space.
