By Jon Peterson
San Francisco-based The Swig Company is in the process of buying its first real estate asset in the Seattle market with its planned purchase of the Lake Union Building located at 1700 Westlake Avenue North. The purchase price is $67 million for the building, or just around $736 per square foot, and an additional $4 million for the adjacent marina, according to sources familiar with the transaction details.
“We never comment on rumored transactions, but we can confirm that Seattle is a market where we are very interested in acquiring high-quality office assets,” a representative for Swig stated in an email to The Registry.
The transaction has not closed at this time. The deal on the property is expected to have a final closing sometime in June, according to sources tracking the sale of the property. The listing agent on the sale of the property was Newmark, which represented an entity affiliated with Seattle-based Henbart, also the original developer on the property, in the sale. The property was originally constructed in 1970, and Henbart has been managing the property since then. The asset is a multi-tenant building.
The 91,000-square-foot property has a total of seven floors that all have waterfront views. When Swig closes on the deal, it will have an opportunity to add value to the property in the future, since rents are below market levels creating a mark-to-market opportunity once the current leases expire.
The property also has access to the marina located near the structure, which offers 61 slips. The property has been designated as a LEED gold property, and it also has a parking garage that covers approximately 230 spaces.
The Lake Union Building is situated within the South Lake Union submarket of Seattle. In this region, there is a total of 10.8 million square feet of properties, as stated in Newmark’s first quarter 2022 market report. The occupancy in the market stood at 94.9 percent during the time period.
In 2017, Henbart announced that the property had undergone a renovation and installed 20,400 square feet of View double‐pane dynamic glass windows operated by an intelligent control system, replacing the original single-pane windows in the building. As part of a building repositioning, Henbart also installed efficient lighting and HVAC systems.
The property is in close proximity to a number of prominent properties that have traded recently. BioMed Realty spent $151.5 million in April of this year to purchase the Meta-occupied 1101 Westlake. In June of 2019, San Francisco-based DivcoWest paid $118.3 million to acquire the 212,623 square foot property located at 1505 Westlake Avenue North, and Seattle-based Vulcan is planning a 289,000 square foot office property located at 630 Westlake.
The Swig Company is known as a buyer of limited-risk urban office assets, according to its website. It has a portfolio of around 9 million square feet primarily invested in Northern and Southern California and Manhattan. Most of its transactions involve value-add properties where income can be increased through physical transformations, leasing and through structuring and implementation of complex financial transactions.