By Jack Stubbs
A Honolulu-based company recently made moves to expand its portfolio in the region, acquiring a three-building office property in Bellevue leased to Microsoft Corporation.
On Monday, March 5th, Honolulu-based Shidler Group acquired the 600,000 square foot Advanta Office Commons located along the I-90 Corridor in Bellevue for $224.85 million, or approximately $375 per square foot including the garage structure, according to public records filed with King County. The seller of the property was JP Morgan Chase Bank.
Jason Flynn with Eastdil Secured worked with JP Morgan on the transaction.
JP Morgan takes a slight hit on the property they acquired for $240 million from Bellevue-based Schnizter West in 2010.
Neither of the company contacts for the buyer or the seller listed in public documents responded to calls for comment about the transaction in time for the publishing of this story.
The CollinsWoerman-desinged Advanta Office Commons property, located at 3005 160th Ave. S.E., contains three seven-story office buildings built in 2008 that total approximately 600,000 square feet as well as an adjacent 8-story parking garage built in 2007 containing 1,158 stalls, according to public documents.
According to the property listing on Schnitzer West’s web site, the three-building office property offers easy access to Interstate-90 and Interstate-405. The energy-efficient campus also includes a landscaped outdoor plaza as well as an on-site conference and training center, fitness facility and media center.
The property is roughly one mile north of Bellevue’s Eastgate neighborhood and approximately three miles to the east of the Factoria neighborhood. Additionally, the asset sits in close proximity to I-90, less than one mile from access to the prominent transit corridor.
Founded in 1972, and headquartered in Honolulu, The Shidler Group is a commercial real estate investment organization. The Shidler Group, its managing partners and the Shidler Family Trust invest directly for their own accounts in addition to providing equity and debt capital to third-party owners of institutional-grade commercial properties and portfolios, according to the company’s web site.
Since its founding, the company has made debt and/or equity investments in over 2,000 properties located across the country comprising over 150 million leasable square feet through its affiliates.
One of the primary focuses of the company is to invest in land on which commercial buildings with long-term ground leases sit, and this was the case with the company’s recent acquisition of the Advanta Office Commons as well: of the total $224.85 million transaction price, Shidler paid $200 million for the three seven-story buildings and $24.85 million for the land on which the structures sit.
In August 2016, Shidler Group acquired two parcels of land on ground leases located beneath the University of Washington School of Medicine research facilities for $133.6 million from Vulcan Real Estate. The two-parcel asset, located in South Lake Union, represents a 2.4-acre, full-block site with three laboratory and office buildings totaling 361,000 square feet: Shidler paid $98.9 million for the property at 850 Republican and $34.7 million for 815 Mercer.
Terra Funding Trust, an affiliate of the Shidler Group, invests in the land underlying significant commercial buildings for the benefit of the Shidler Family Foundation and various educational institutions that it supports, according to the company’s web site, donating specific interests in properties that it acquires to support public university-level education. Beneficiaries include the University of Washington School of Law and the University of Washington School of Medicine.
The sale of the three-building complex follows on the heels of several other large-scale transactions in Bellevue in recent months. In October 2017, New York-based TriStar Capital and RFR Holding acquired the 16-story Center 425 Building located in Bellevue’s CBD for $313 million from Schnitzer West. In November 2017, Keppel-KBS US REIT acquired two commercial buildings—The Plaza Buildings and the Bellevue Technology Center—for a combined $371.1 million from KBS Strategic Opportunity REIT, Inc., an entity affiliated with KBS Realty.