By Jack Stubbs
There have been a number of commercial office transactions in the city of Redmond in recent months, and the five-story, Class A Redmond Technology Center recently sold for $37.6 million, or approximately $372 per square foot, according to public records filed with King County. The buyer was Bellevue-based Sterling Realty Organization (SRO), a locally-owned commercial real estate company, and the seller was Transwestern Investment Group (TIG), a real estate investment management firm based in Dallas, Texas.
The buyer declined to comment on the transaction and the seller—who was represented in the transaction by Kidder Mathews and acquired the asset for $30.25 million from Menlo Equities in June 2016—did not respond to calls for comment.
The property was put on the market for sale—along with the City Center Redmond project located at 16135 Northeast 85th Street—in mid-July 2018.
The Redmond Technology Center, located at 18300 Redmond Way, was built in 2008 and totals 100,978 rentable square feet, according to the property listing on Kidder Mathews’ web site. Sitting on 5.35 acres, the property is LEED Gold certified for core and shell and also includes 312 parking stalls across two below-grade levels. Additionally, the property features an exterior landscaped seating area, a state-of-the-art HVAC system, and is “designed for both tenants seeking highly creative space with high ceilings and concrete floors or traditional tenants seeking a sophisticated Class A office environment,” according to the flyer.
The property features large and efficient floor plates that allow for 125 square foot per person density, and the building’s shell condition provides tenants with the ability to custom-design their office in as little as two months in a creative, inspiring space.
It is not entirely clear how much space is currently available in the Redmond Technology Center. According to the property listing on loopnet.com, there are just over 19,000 square feet available across two suites on the second floor. According to Google Maps, some of the current tenants include DriveShop, The Retirement Solution Inc., and Pushpay.
The property is approximately two miles south of downtown Redmond and sits adjacent to Marymoor Park in the Campton neighborhood. The building is also roughly nine miles northeast of Redmond and about three miles from access to Washington State Route 520.
Founded in 1912, SRO specializes in the ownership, acquisition and development of high-quality properties for long-term management, according to the company’s web site. SRO manages roughly 1.9 million square feet of primarily retail, office and office park space in Washington and Oregon. The company’s capture of the Redmond Technology Campus adds to its Pacific Northwest portfolio, which includes properties spanning from Bellingham to Kent. Some of the company’s other assets throughout the Puget Sound region include the 108,204 square foot Sterling Business Park in Muktilteo; the 3,853 square foot Factoria Commons property in Bellevue; and Lynwood Crossroads, a 123,724 square foot asset in Lynnwood.
According to The Registry’s reporting, Sterling Realty was last active in the Puget Sound region in July 2017 when it acquired the approximately 105,000 square foot Island Corporate Center located at 7525 SE 24th Street on Mercer Island for $41 million, or roughly $390 per square foot, from Walton Street Capital.
TIG is an independent real estate investment management firm that serves a broad range of investors through a diversified array of discretionary and non-discretionary investment vehicles, according to the company’s web site. As of June 30th 2018, the company had $4.4 billion worth of assets under management.
There have been a number of large-scale transactions in the King County city of Redmond over the last few months, indicating that investor interest in the city remains. In early August 2018, Los Angeles-based Preylock Real Estate Holdings spent $136 million, or approximately $322 per square foot, to acquire the seven-building Willow Creek Corporate Center located along Willows Road from Blackstone Group. In mid-July, San Francisco-based TPG Real Estate acquired the Microsoft-occupied, 536,958 square foot office complex Millennium Corporate Park for $153.5 million, or close to $286 per square foot, from TH Real Estate. And in late September, Singapore-based joint venture Keppel-KBS US REIT announced its plans to purchase the 21-building Westpark Portfolio business campus—located at 8200 – 8644 154th Ave. NE—for $169.4 million.