By Jack Stubbs
On Wednesday, November 8th, Keppel-KBS US REIT acquired two commercial buildings in Bellevue for a combined $371.1 million, according to public records filed with King County. The Plaza Buildings, located at 10800 and 10900 NE 8th Street, sold for $240 million, or roughly $489 per leasable square foot, while the Bellevue Technology Center, located at 15805 NE 24th Street, sold for $131.1 million, or $396 per leasable square foot. The valuation of the Technology Center takes into account the vacant lot, which may be developed in the future.
Keppel-KBS U.S. REIT is an entity affiliated with KBS Realty Advisors, one of the nation’s preeminent buyers of commercial real estate and structured debt investments based in Newport Beach, California. The seller of the two properties, KBS Strategic Opportunity (SOR) REIT, Inc., is another entity affiliated with KBS Realty. The transactions were recorded on November 13th.
KBS SOR REIT Inc. bought the Plaza Buildings from Beacon Capital Partners for approximately $186.4 million in January 2014. In July 2012, the company bought the Bellevue Technology Center from Unigard Insurance Company for $78,660,000.
Built in 1983, the Plaza Buildings properties total 490,994 net leasable square feet and consist of two Class A office buildings: the 16-story Plaza Center and the 10-story US Bank Plaza. The two buildings are surrounded by a variety of retail amenities, dining options and parks, according to Keppel KBS U.S. REIT’s web site. Additionally, both of the Class A assets have been improved and refurbished to meet the needs of a wide variety of tenants from several industries including finance, computer system design, programing and real estate. Additionally, the property includes 1,254 parking stalls within a six-story structure.
As of June 2017, the Plaza Center was valued at $243.9 million, according to the property owner’s web site. The property’s location is one of its primary assets, sitting along one of the most active transit corridors in Bellevue’s central business district. Additionally, the commercial asset is less than half a mile from downtown Bellevue and the Transit Center, and sits in close proximity to Interstate 405. Some of the prominent amenities on-site include 24-hour security, bike storage, car share service, on-site management office and a fitness center, according to KBS Realty’s web site.
The Bellevue Technology Center, originally built in 1973, is comprised of nine buildings totaling 330,508 net leasable square feet. The Class A office campus sits on 46 acres of land and also includes a 1,320-stall underground parking garage. According to KBS Realty’s web site, the property uses the diverse functionality of the nine different buildings to attract institutional-quality tenants on a triple-net lease basis. Additionally, the office campus currently represents an attractive proposition for potential tenants, with no material capital requirements or maintenance issues. Some of the prominent on-site amenities include a conference center, bike storage, locker rooms with showers and a tenant lounge, according to the web site.
Located at 15805 NE 24th Street, the nine-building office park is roughly four miles to the east of downtown Bellevue and five miles from access to Washington State Route 520. Additionally, the property is less than a mile to the south of Microsoft’s Redmond corporate headquarters, a fact that might benefit the office park, since new ventures by Microsoft in the future could result in an increase in vendors and contractors who work with the software company, according to the property listing on Keppel KBS U.S. REIT’s web site.
Over the last five years, the office campus has undergone various capital improvements, including an upgraded fitness centre, conference room, full-service café and new parking stalls. As of June 2017, the property was valued at $133 million, according to the company’s web site.
Keppel-KBS US REIT, listed on November 9th 2017 on the Singapore Exchange Securities Trading Limited, invests in a diversified portfolio of income-producing commercial real estate assets in key growth markets nationwide, including Washington, California, Texas and Colorado according to the entity’s web site. Keppel-KBS has a portfolio currently comprised of 11 office properties with an aggregate net leasable area of 3.2 million square feet, assets that serve clients across various industries such as as technology, finance, professional services and healthcare.
KBS Realty Advisors, the REIT’s parent company founded in 1992, operates transactions in the office, industrial, multifamily and retail sectors.