By Meghan Hall
In the last 24 hours alone, a slew of huge commercial property transactions has hit the Puget Sound market, the latest being the sale of the Roosevelt Commons at the University of Washington. In a transaction that closed on December 12th, Deutsche Asset and Wealth Management sold two buildings—home to credit tenants Seattle Children’s and UW Professional and Continuing Education—for $157 million, or about $703 per square foot. The buyer of the assets was Boston-based Intercontinental Real Estate Corporation, according to public documents.
“We have been searching for the ideal Seattle office investment with a particular focus on the U-District which is in the early phases of tremendous change,” said Intercontinental’s senior director of acquisitions Jessica Levin in a statement. “The combination of the new light rail station, new up-zoning which calls for increased density in the area, and the University of Washington’s master plan, will certainly reshape the U-District. We believe we are getting in at an opportune time in the U-District’s lifecycle.”
Jeffrey Weber and Jason Flynn from Eastdil Secured’s San Francisco office represented both parties in the transaction.
Seattle Children’s and UW’s Continuing Education Dept. are located at 4300 and 4311 Roosevelt Ave. NE., respectively. The two properties, which are 100 percent leased, are located on one of the busiest thoroughfares in the neighborhood, located just outside the main drag of the U-District and minutes from the greater University of Washington Campus. Together, the buildings are known as the Roosevelt Commons. Building A, where Seattle Children’s is based, was constructed in 2002 and totals 133,741 square feet, according to parcel data. Building B, also constructed in 2002, is smaller at 89,475 square feet.
Intercontinental Real Estate Corp. was formed in the 1960s, and has surpassed more than $3 billion of assets under its management, according to its website. The firm is also responsible for developing and owning more than $8 billion in real estate property across the United States. Its latest acquisition brings the firm’s portfolio in the Pacific Northwest to more than 2,000 multifamily units and 300,000 square feet of space. Intercontinental Real Estate Corporation also owns the Lighthouse Apartments off of Delridge Way in Seattle, comprised of 239 units spread over 40 buildings, originally constructed in 1990 and renovated in 2007. Intercontinental Real Estate also owns On the Green, a 294-unit Class B complex in Mukilteo, Wash., which is part of the 2,300-acre Harbour Pointe master-planned community.
The transaction joins many others that are wrapping up at the end of the fourth quarter, in what seems like a race to the finish line to beat out the new excise tax law that will take effect at the beginning of next year. Under current law, the tax rate is 1.28 percent, and the tax is typically paid by the seller of the property. With the new legislation in place, the tax rate will jump to three percent, providing extra motivation for sellers looking to close on big transactions before the year’s end.
Within the last week alone, JP Morgan spent $206.25 million on an Amazon-occupied office tower in Seattle, while Kilroy Realty purchased five properties downtown to the tune of $133 million. Over in Bellevue, Bosa sold three properties to Schnitzer West in a deal that closed at $65 million, and Clarion Partners spent $53.5 million to acquire the 76,000 Washington Federal Building. However, with several weeks still left in the year, there is still plenty of time for additional deals to close.