By Jon Peterson
Los Angeles-based PCCP and San Francisco-based Align Real Estate have come together to pay $39 million or $356 per square foot to acquire the 110,372 square foot Bellevue Pacific Center in Bellevue, according to multiple sources aware of the transaction. The property is located at Northeast 2nd Avenue between 106th and 107th Avenues.
“We think that our price point we got into the market with this property is very attractive. I think it represents the difference between the prices being paid for the top tier properties in Bellevue and what we acquired, which is a B+ quality property. I think that difference in pricing can be as much as 30 percent to 40 percent,” says Erik Flynn, a managing director with PCCP. He works out of the company’s regional office in San Francisco.
It’s a good piece of real estate in a good location with a strong list of tenants in the property that has performed well.
The sales price was a little less than what Chicago-based LaSalle Investment Management paid for the property when it acquired it in 2007, according to sources that track property sales in Bellevue. A company representative of LaSalle did not respond to e-mails seeking comment for this story. The seller sold the property with the assistance of Eastdil Secured.
PCCP is pleased with the asset purchase partly because of its tenant roll and overall performance. “It’s a good piece of real estate in a good location with a strong list of tenants in the property that has performed well,” said Flynn. The 1995 vintage property is 95 percent occupied currently. Its main tenants are Opus Bank, TIAA-CREF and a 24-Hour Fitness location.
The fact that is has a 24-Hour Fitness and that 17 of the 23-story complex is made up of residential condos is one reason why the project has a three-level parking garage that can accommodate 315 stalls. “This amount of parking is twice the normal amount of parking for the Bellevue market. It does add some additional value to the property and might in the future lead to a potential redevelopment opportunity,” said Flynn.
The Bellevue office market is one that has been showing good results. It continues to see the highest growth in rental rates in the Seattle sub-market with premium buildings producing a rental rate growth of 12.7 percent during 2014. For this year there are rental rate growth projections of around 8 percent with continued growth over the next four years.