By Jon Peterson
San Francisco-based Swift Real Estate Partners has sold the 92,200 square foot office building Bel Spring in Bellevue located at 11808 Northup Way to San Diego-based American Assets Trust. The sales price on the transaction was $45.5 million, or just around $493 per square foot, according to public records. Swift declined to comment on the sales price.
The seller was represented in the transaction by Newmark. One of the people who worked on the sale for Swift was Kevin Shannon, co-head of US Capital Markets for Newmark.
“The improvement in Seattle’s Eastside office market has continued to exceed expectations allowing owners like Swift to accelerate their disposition plans and still meet or more often exceed their targeted returns with a much shorter than anticipated holding period,” said Shannon in a statement.
Swift had owned of the property since August of 2019. It had purchased the property for $32 million at that time, according to sources familiar with the property.
The timing of this latest transaction shows that Swift sold the asset much earlier than it had anticipated. Swift had originally planned to have a four to five-year holding period with the asset, as stated by sources who spoke to The Registry. “This early sale was possible because Swift completed the business plan by making upgrades to the asset and increasing lease rates while executing 30,000 square feet of new and renewal leases at the property,” says Kurt Nelson, a director with Swift who works out of the company’s Portland office and oversees its investment and sales efforts in the Pacific Northwest. Also, the 42 percent premium on the purchase price in two and a half years brought the company to the negotiating table.
The leases that Swift was able to negotiate have been signed over the past 18 months and some of them may be slightly below market rates; rents in the Bellevue office market have continued to increase over that period of time. The property is now 70 percent occupied, and one of the largest new tenants in the building is Texas Instruments.
Swift is still a strong believer in the upside potential of the office market in Bellevue. “We have been investing in the Bellevue office market for close to 10 years, and it continues to be one of the strongest markets in our portfolio. A major reason behind this is that the area continues to attract demand from some of the major technology-based companies like Amazon, Meta, Google and Microsoft,” says Therin Heryford, the lead associate for Swift’s Pacific Northwest team.