Home Commercial Lionstone Investments Spends $48.5MM to Acquire Gateway I Office Building in Bellevue

Lionstone Investments Spends $48.5MM to Acquire Gateway I Office Building in Bellevue

Seattle, Lionstone Investments, Central Business District, Talon Private Capital, Kirkland Urban, Gateway I Office Building
Image courtesy of Talon Private Capital

By Jack Stubbs

Bellevue’s Central Business District has seen a number of commercial properties change hands, with local- and out-of-town investors looking to capitalize on the Eastside city’s dynamic office market—and another asset, located to the Southeast of the CBD, recently traded for a sizable sum. 

On September 20th, the Gateway I Building sold for $48.5 million, or around $442 per square foot, King County records show. The buyer, Regency Bellevue Holdings LLC, shares the same address as Lionstone Investments, a data analytics-driven real estate investment firm based in Houston, TX. The seller was Bellevue-based Talon Private Capital, a commercial real estate private equity investment firm whose portfolio includes residential and commercial properties across the West Coast.  

The Gateway One Building, located at 11400 SE Eighth St. adjacent to Interstate-405 and roughly just over one mile south of Bellevue’s CBD, totals 109,514 square feet, according to the property description on the seller’s web site. Since Talon Private Capital acquired the property in 2012, Gateway I has been repositioned with $4.6 million of renovations, including a brand new, three-story lobby and building entryway, a state-of-the-art conference center, HVAC, common area, and amenity upgrades. Gateway I has seen a 15 percent increase in rents and a bump in occupancy from 44 percent to 100 percent. 

According to Google Maps, some of the tenants in Gateway I include Prudential-Northwest Financial Associates, Ticor Tile Company and GE Aircraft Engines. 

The property is just north of the Mercer Slough Environmental Education Center and about one mile from attractions in Bellevue’s Central Business District including the Bellevue Square Shopping Center, the Meydenbauer Convention Center and the Bellevue Arts Museum. 

As of June 30th, 2018, Lionstone Investments’ portfolio included 17,049 square feet of assets, with $1.3 billion in investments in 2017 and 2018. As of the middle of last year, the company had ten projects in active development. According to the company’s web site, one of the firm’s main objectives is to achieve long-term reduction in its properties in energy and water usage and waste, with the goal of reducing water usage by 30 percent and increasing recycling rates to at least 75 percent over a ten-year period. 

Talon Private Capital focuses on select urban metropolitan markets that have sustained employment growth, intellectual capital, and a favorable quality of life, according to the company’s web site. Its current investment activities center in Seattle, Portland, Dallas and Austin.

In partnership with Prudential Global Investment Management and Ryan Companies, Talon Private Capital is currently underway with the construction of Kirkland Urban, a mixed-use campus that will ultimately comprise around 1 million square feet. 

Upon completion of Phase 1 in 2019, Kirkland Urban saw the delivery of 400,000 square feet of office space; 165,000 square feet of new retail; and over 185 luxury apartment units. At the time of groundbreaking, Talon had been successful in achieving nearly 50 percent preleasing of the office and 40 percent of the retail space. 

Some of Talon Private Capital’s other assets in the Puget Sound region include 90 North and Bellefield Office Park in Bellevue on the Eastside, and 300,710 square foot 8th and Olive property in downtown Seattle, which the company acquired in 2014 and sold in 2017.