By Jack Stubbs
Downtown Bellevue has been a hotbed of development and transaction activity in recent weeks, and another 7-story Class A office building recently changed hands. On Tuesday, October 9th, the 110 Atrium Building sold for $111.22 million, or approximately $472 per square foot, King County records show. The buyer was Scanlan Kemper Bard Companies (SKB), a privately-held real estate merchant bank based in Portland, Oregon. The seller was LVA4 Bellevue Atrium Place LLC, an entity affiliated with John W. Enerson of Houston, Texas-based Lionstone Investments. The sale was recorded on October 15th.
For the buyer, the capture of the Atrium Building comes at the right time in terms of the company’s continued presence in the Puget Sound region, according to Todd Gooding, president and principal at SKB. “We had liquidated most of our Seattle and Puget Sound assets around 2016, so we’re excited to be back,” he said. “When you look at the projected employment growth in the Seattle metro area versus the other west coast cities, it outpaces them by far, so we’re excited about the prospect of the continued growth and market demand.”
The seller acquired the asset in partnership with Talon Private Capital for $81.5 million, or roughly $346 per square foot, in November 2016, according to public documents.
The Atrium office building, located at 110 110th Ave. NE just a few blocks east of Bellevue’s Central Business District, is a Class A office building constructed in 1981 that totals 235,500 square feet, according to the property listing on commercialcafe.com. According to the property listing on Bellevue Downtown Association’s web site, the building is currently 84 percent leased and major tenants include Unity Technologies and BSQUARE Corporation. According to Google Maps, other tenants in the building include EPAM Systems Seattle and LG Electronics R&D Office. The centrally-located property features “modern amenities, light-filled spaces, secure parking and exceptional executive office space,” the web site notes.
At the time of the acquisition, Talon hoped to capitalize on the central location of the 110 Atrium Building. “Talon’s acquisition was driven by our recognition of the pending light rail station next door and the abundant new residential development in this part of the CBD,” the web site states. “Talon believes this asset will be at the forefront of Bellevue’s growth and activation.” The building and its tenants are served by Bellevue Downtown Association’s transportation management program, TransManage.
The property is less than one mile east of the CBD and about one mile from the Bellevue Downtown Park. Additionally, the asset is roughly four miles from access to I-405 and just half a mile from the Bellevue Square shopping center.
There have been a number of transactions in downtown Bellevue in recent months. On September 28th, Pinnacle International Group spent $145 million on the Bellevue Central Business District Gateway Development Site, a multi-parcel property comprising 11.3 acres and located at various addresses including 1036 100th Ave. NE. According to NKF Capital Markets—who represented the seller, Fortin Group, in the transaction—the site has a development potential in excess of 2.5 million square feet.
In late August, Trilogy Equity Partners sold a three-parcel property containing various retail buildings in downtown Bellevue—located at 810, 826 and 832 102nd Ave. NE—for just over $55 million from a private investor based in Bellevue. The retail space is approximately one mile west of the One Twelfth and Twelfth office campus where another technology company is intent on expanding its footprint. Google recently signed an 80,000 square foot lease in the three-building One Twelfth @ Twelfth office campus just north of downtown Bellevue, according to an industry source with knowledge of the transaction, and plans to lease 30,000 more feet through a combination of direct leases and subleases.
Founded in 1993, SKB acquires, manages and transforms commercial properties into profitable, risk-adjusted returns for select high-net-worth individuals, family offices, trusts and institutional investors, according to the company’s web site. Since the company’s founding, it has originated more than $4.18 billion in total portfolio activity. The company has acquired 28.3 million square feet, has realized a total of 71 deals and has 17 institutional partners that manage over $3 trillion.