Home Commercial Quadrant Willows Corporate Center in Redmond Trades for $73.6MM

Quadrant Willows Corporate Center in Redmond Trades for $73.6MM

Quadrant Willows Corporate Center, Redmond, Equus Partners, The Roxborough Group, Preylock Real Estate, 90 North
Image Courtesy of Equus Capital Partners

By Meghan Hall

Commercial property values on the Eastside continue to soar, as seen by the latest transaction between Philadelphia-based Equus Capital Partners and San Francisco-based The Roxborough Group. In a two-part deal that closed today, November 26th, Equus Partners sold off the four-building Quadrant Willows Corporate Center in Redmond for significantly more than its original purchase price. The Roxborough Group acquired the property for $73.6 million, or roughly $297 per square foot.

The portfolio was 100% leased at the time of sale. Newmark Knight Frank advised Equus through all stages of the marketing, due diligence, and sales process. The buyer, Roxborough, was self-represented, according to a release from the seller.

According to Equus Partners’ website, Quadrant Willows Buildings B, D, C and E contain 248,041 square feet of space and are 100 percent occupied. Quadrant Willows B &D is part of a two-building complex constructed in 1997 and 2001 and is located on 7.2 acres. Building B totals 62,854 square feet, while Building D is slightly smaller, at 55,204 square feet. 

Quadrant Willows C and E is another two-building project built in 1998 and 2000 and is situated on 9.1 acres. The two buildings are 71,011 square feet and 58,961 square feet, respectively. The pair of buildings was renovated in 2008 and has undergone around $1 million worth of renovations to common-are lobbies and restrooms as well as furniture, signage and mechanical systems. 

“The four buildings are situated in one of the strongest economies in the United States,” states Equus Capital on its website. “In addition to employment concentration in software, aerospace, technology, and wireless communications, Redmond, along with nearby Kirkland and Bellevue, serves as headquarters for the highest concentration of interactive gaming companies in the United States.” Other nearby companies include Amazon and Starbucks. 

NKF Co-Head of U.S. Capital Markets Kevin Shannon, Vice Chairman Nick Kucha, Executive Managing Director Ken White, Senior Managing Director Michael Moll, Director James Childress, Executive Managing Director Joe Lynch and Senior Managing Director, Dan Harden represented the seller, Equus.

“Selling a building of this size, quality and tenancy is rare in a market like Willows Road, one of the nation’s top performing suburban micro markets,” said Nick Kucha of NKF in a statement. “We received interest from several domestic investors but were delighted to work with The Roxborough Group on behalf of Equus Partners.”

Equus Partners originally acquired buildings B and D in January of 2017 for $22.3 million, or $11.9 million and $10.4 million respectively. Buildings C and E were purchased from Foster City, Calif.-based Legacy Partners, now known as SteelWave for a combined $25.6 million, or about $197 per square foot, back in March of 2016, according to The Registry’s reporting. 

Although the buildings are currently 100 percent occupied, The Roxborough Group hopes to benefit from in-place rents that are significantly below market and the desire of some tenants who have outgrown their current suites to give back space in a tight Redmond leasing environment with limited new construction, according to a statement. “The unprecedented expansion by technology tenants along Willows Road and in the broader Redmond, Kirkland and Bellevue markets has driven office space availability in Quadrant Willow’s surrounding submarkets to historic lows,” said Matt McCormick, managing director for Roxborough. “We are very excited about closing our second office acquisition in the Eastside of Seattle this year and for the opportunity to participate in its rapid economic expansion.”

Redmond and Willows Road are experiencing continued growth and strong fundamentals. The submarket is benefitting from Microsoft’s massive campus redevelopment and the Eastlink Light Rail connecting the greater Eastside to Seattle. “The Redmond submarket is one of the most dynamic Eastside submarkets with 21.5 percent rent growth over the past 24 months. Vacancy, including Microsoft, is at 4.4 percent with overall Eastside vacancy at 4.3 percent. Recent lease commitments and expansions from Facebook in the Spring District, Google in Kirkland, Amazon in the Bellevue CBD and Facebook Technologies along Willows Road continue to drive rents higher, making suburban office investments very attractive,” said Joe Lynch of NKF.

The Roxborough’s acquisition price of $73.6 million represents a nearly 63 percent increase in purchase price over just a few years and is indicative of the investors’ thirst for Eastside inventory. In a transaction that also closed this week, Preylock Real Estate purchased the four-building 90 North Campus in Bellevue for $117 million. Two years ago, the seller of the property acquired the campus—all four buildings—for just $35.75 million.