By Jon Peterson
San Francisco-based Swift Real Estate Partners has placed on the market for sale the 146,093 square foot two-building Overlake 520 office asset in Bellevue located at 14335 and 14475 Northeast 24th Street. Pricing of the potential sale could come in at around $425 to $450 per square foot or in the range of $62 million to $65 million, according to sources familiar with the sale of the property.
Swift declined to comment on the possible sales price on the property. Tom Harris, an investment manager with Swift, will be leading the sales initiative at the company. He and Kurt Nelson, a director at Swift, both lead the company’s efforts in the Seattle market. The listing agent on the sale is Newmark Knight Frank.
“Overlake 520 has been one of our top performing assets in our portfolio in the Bellevue market, which is of itself a very highly performing market for our company with great upside for the future,” said Harris.
One of the reasons that Swift is bringing the property up for sale is that it was able to finish its business plan for the asset much sooner than he company had anticipated. It had acquired the property for $45 million in June of 2018. At the time, the idea was that it would take five years to complete its business plan. The property was 21 percent vacant when the asset was acquired. Within six months of ownership, the property became a fully occupied asset. One of its new tenants coming into the property is Infosys, which took 39,000 square feet in the building. The property has many tenants that are under leases with several years remaining, and with the property now fully leased, Swift felt it may be a good time to sell the asset.
Swift has made some minor improvements to the property beyond its leasing success. This work has included re-doing the parking lot, deferred maintenance, an elevator lobby upgrade and overall new signage for the asset. The two office buildings in Overlake 520 are open, and tenants are allowed to have their employees come back to the office if they want to. Both the outdoor lounge and fitness center are available to employees, as well.
The asset that Swift is selling is part of the Bellevue East office sub-market. This part of Bellevue has very strong market fundamentals. Since the seller has owned the asset, rents in the area have increased by 20 percent to 25 percent. Through the second quarter of this year, vacancy in the sub-market is at 6.5 percent, according to industry sources.