By Jon Peterson
Atlanta-based Stockbridge has put up for sale the 95,194 square foot North Creek Place office building in Bothell, according to sources familiar with the property. No pricing guidance on the trade was available at this time.
The seller has awarded the listing on the sale to Newmark. The team working on the transaction includes Kevin Shannon, co-head US Capital Markets, and Nick Kucha, vice chairman Pacific Northwest. Newmark declined to comment when contact for this story.
Stockbridge representative stated in an email that the company is declining to provide comment for this story. The real estate investment firm has owned the asset for nearly a decade, and it acquired the property from Seattle-based Schnitzer West for $24.5 million at that time, according to public records.
There have been some other properties sold close to North Creek Place this year. One example of these transactions that could be a comparable sale was the 205,000 square foot North Creek Parkway Center that was sold in January for $62.1 million, or $301 per square foot, according to public records. The buyer was Fort Worth, Tex. and San Francisco, Calif. -based TPG Real Estate.
North Creek Place is a traditional office building located at 12100 NE 195th Street. The property is split with 90,062 square feet of Class A office space and another 5,132 square feet of storage space. The asset is now 86 percent leased. The only vacancy in the property is on the first floor, and the in-place leases have an average weighted lease term remaining of 6.2 years. The asset has a proven ability to secure 7 to 10-year leases from its tenants.
Stockbridge has recently made some improvements to the asset. This includes a full lobby renovation, and 86 percent of the property’s suites have received first generation tenant improvement build-outs.
Real estate firms that track the office market in Bothell view this sub-market as a lower priced rental rate market compared to its neighbors to the south, Seattle and Bellevue. Bothell offers a 40 percent to 50 percent rental discount for similar office space than in downtown Seattle and Bellevue, and roughly 20 percent to 30 percent discount to the rest of the Eastside market. Presently, over 50 percent of the active tenant requirements in Bothell are from tenants located outside of the Bothell sub-market.
The Bothell sub-market for traditional office space has very strong market fundamentals. Its current direct office vacancy is 5.9 percent, according to industry sources. This is expected to continue to drop in the future as more properties are converted to life science and no new development occurs in the city. With over 500,000 square feet of active tenant requirements in the market and only 3.4 million square feet of total space in the sub-market, Bothell will likely continue to experience vacancy compression in the future.