By Meghan Hall
Denver, Colo.-based EverWest Real Estate Investors is slowly expanding its presence in Seattle, buying up a mix of industrial, warehouse and office assets in cities such as Auburn and Kent. Now, the firm is diving into Seattle, and the heart of the region, with its recent acquisition of the Olympic Block Building, just outside of Pioneer Square. According to public documents, EverWest, in partnership with Chilean firm Frontal Trust, purchased the 73,557 square foot property from New York City-based Brickman Real Estate for $34.25 million in a deal that closed at the end of June.
“We have been monitoring the Seattle office market for a long time, looking for a project that fits the right size, submarket and value profile,” said EverWest’s Managing Director Ryan Madson in a statement. “Olympic Block checks all of those boxes, operating as a modern mixed-use asset while still allowing us to add value and capitalize on the area’s double-digit rent growth through strategic leasing and interior improvements.”
EverWest’s purchase includes six floors of the Olympic Block building, six floors of the Lippy Building, built in 1889, and 8,576 square feet of ground floor retail space. The project also includes three floors of residential space that is owned by a separate entity that were not part of the acquisition.
The buildings cater to creative light-tech tenants, and the property is currently 90 percent leased.
Located at 101 Yesler Way, Brickman had originally acquired the nine-story office and retail building in November 2015. The building was originally constructed in 1986 and is in the heart of Pioneer Square, a major commercial and retail corridor in the heart of Seattle. The property is located near the King Street Light Rail Station, Interstate 5 and the Colman Dock and Ferry Terminal. Numerous other retailers and eateries, from Alstadt Bierhalle and Brathaus, to Caffe Umbria, to Café Pho are all within walking distance of the property.
In October 2017, EverWest also purchased a three-building infill industrial portfolio from Denver-based Black Creek Group. The assets, part of the West Valley Distribution in Kent, included buildings One, Three and Five and were purchased for $17.5 million. A year later in September 2018, EverWest purchased three additional industrial and warehouse assets in Auburn, Wash., for $30.5 million. The buildings, located at 701 and 713 A St. NE and 701 A St. NW, sit on just over 13 acres and total just over 173,000 square feet. EverWest acquired the properties from another Denver-based company, Gates LLC, associated with William Gates from Mercer Island.
The Puget Sound office market continues to plough ahead, according to a first quarter regional office report released by brokerage firm Newmark Knight Frank. Average asking rents reached $37.14 per square foot, up 0.6 percent, compared with the fourth quarter of 2018, while vacancy rates decreased to 8.1 percent, the lowest level reached since before the Great Recession. Downtown Seattle, where the Olympic Block Building is located, saw even higher rent acceleration. Asking rents downtown increased 1.1 percent compared to the end of 2018 to $43.31 per square foot, while vacancy came in at 6.9 percent. Office space downtown continues to trade at a premium, as seen in Blackstone’s acquisition of 800 Fifth Ave. in the Central Business District for $540 million, or $590 per square foot. CIM Group also purchased the Dexter Horton Building from Pacific Eagle Holdings for $151 million, or $449 per square foot. In perhaps one of the region’s largest transactions, EQ Office, owned by Blackstone, purchased the U.S. Bank Centre for $612 million and 999 Third Ave. for just under $600 million, according to industry reporting.
EverWest Real Estate Investors is a wholly-owned subsidiary of GWL Realty Advisors. The firm targets properties that present opportunities for capital appreciation, strategic acquisition, development, capitalization and repositioning. The firm owns multiple core, core-plus and value-add opportunities throughout the United States, including San Diego, Calif., Austin, Texas, and Brooklyn, N.Y.