By Jon Peterson
Meriwether Partners, with company offices in both Seattle and Portland, has made the decision to place on the market for sale the Russell Hall mixed-use property located in Seattle’s U District. No pricing guidance on the sale of the property was available at this time.
The real estate investment firm has owned the property since the fall of 2016 when it acquired the building for $30.7 million, or around $491 per square foot, according to sources that were tracking the sale of the property at that time. When the asset was purchased, the sale produced a six percent cap rate based on the property’s net operating income at the time.
The seller has selected the Seattle office of CBRE to be the listing agent on the sale and to lead the marketing efforts. Among those that will be working on the transaction are Tom Pehl, executive vice president, and Chais Lowell, vice president.
The property is considered a core asset, which will likely attract two types of capital sources to the building. One group of possible buyers includes large institutional investors that are looking for these types of assets in major metropolitan areas. Another group could be private capital investors, such as high net-worth individuals.
Russell Hall is located at 1414 Northeast 42nd Street. The property has a total of 62,426 square feet with no vacancies. Roughly 44,000 square feet of the building is Class A office and retail space on the first four floors. Some of the office tenants include the University of Washington, the National Bureau of Asian Research and Oculus (Meta/Facebook), according to the property’s website. A retail tenant is MOD Pizza. The in-place rents in this part of the property are estimated to be around 15 percent below market rates, which would allow a mark-to-market opportunity for the new owners.
The upper two floors of the buildings consist of 30 apartments. The residences are considered non-traditional student housing for the University of Washington. The occupants are comprised of foreign undergraduate students, graduate students as well as teaching professionals that work for the University.
The building is a concrete and masonry structure that has a rare garage parking available, as well. This portion of the property is situated on a favorable ground lease with 76 years remaining on the term. There are a total of 120 parking stalls on the property. The mixed-use complex was first developed in 2009.
Russell Hall is near plenty of retail and mass transportation amenities. Within a 10-minute walk from the building, is a rich offering of a number of retailers within the University District and is proximate to the University Village shopping center, an upscale retail destination. The property is also two blocks from the newly constructed U District light rail station.