By Jon Peterson
The commercial real estate market in Bellevue has done well over the last couple of years, and investors have poured into Eastside looking for ways to expand their footprint across Puget Sound. For every buyer there is a seller, and two perennial Bellevue investors, Houston-based Lionstone Investments and Seattle-based Talon Private Capital, have decided to place on the market for sale the two office buildings in Bellevue known as the Bellefield Office Park and the Gateway I building. The pricing guidance on the sale of the combined properties is expected to exceed $350 million, according to multiple sources aware that the assets are up for sale.
Lionstone declined to comment on the pricing of the sale. Talon did not respond to a phone call in time for this story. Newmark is the listing agent on the sale. One person working on this transaction is Nick Kucha, vice chairman for the Pacific Northwest Capital Markets, who works out of the company’s Portland office.
Lionstone has owned both properties as a separate account investment for one of its institutional clients. The real estate manager acquired the 15-building Bellefield Office Park in 2014 for $120.2 million, according to published reports, and it added the Gateway I property in September 2019 for $48.5 million, according to public records.
Lionstone is a big believer in the Bellevue office market. “The Bellevue market represents one of the top-performing markets in the country. As such, we are receiving significant interest in the offering from institutional capital seeking exposure to this market,” says Greg Murphy, a vice president of portfolio management for Lionstone.
Bellefield Office Park totals 536,000 square feet spread across fifteen buildings in a scenic suburban setting. It is located at 1309 114th Avenue SE, and the property is now roughly 90 percent occupied. There are currently a total of 100 tenants in the property. The occupants of the property now have an average remaining lease term of five years.
The new owner of the asset will have the opportunity to drive rents in the future. This could be somewhere in the range of 25 percent to 30 percent. This property was developed in phases between the 1970s and 1990s.
Gateway I is a 110,000-square-foot office building asset. The property is located at 11400 SE Eight Street in Bellevue.