By Jack Stubbs
On Wednesday, February 28th, the 43,800 square foot Canyon Park Office Center in Bellevue sold for $9 million, or approximately $205 per square foot, according to public records filed with Snohomish County.
The buyer was JM2T Properties LLC, an entity based in Bellevue. The seller of the office property was BRE WA Office Owner LLC, an entity affiliated with Equity Office Properties, which is a subsidiary of New York-based Blackstone Group. The transaction was recorded on March 8th.
The two-story Canyon Park Office Center, located at 22232 17th Ave. SE., includes 43,800 square feet of office space, according to public documents. The Class B office property was built in 1990. The property is part of the Canyon Park portfolio, which is comprised of nine other buildings. According to the property listing on loopnet.com, there are currently 8,540 square feet of office space available across five floors in the Canyon Park Office Center.
The two-story suburban office building sits above covered parking and is also within walking distance to various retail amenities and is also adjacent to the Park & Ride, according to a property report written by Colliers International. According to Google maps, the office property is currently occupied by Peay Bryan, a loan agency, and North Pacific Mortgage, a mortgage lender.
The property is approximately three miles to the north of Bothell and about seven miles to the south of Lynnwood. The office building is also less than a mile from Canyon Park Place, a 125,600 square foot shopping center anchored by a QFC, and less than ten minutes from access to Interstate-405 and Washington State Route 527.
Blackstone aims to to generate attractive risk-adjusted returns for its investors across cycles and over the long term. The company aims to acquire high-quality investments at discounts to replacement cost, then improving the properties through hands-on management and targeted value-add initiatives, according to the company’s web site. Blackstone’s portfolio spans asset types, including office, retail, hotel, industrial and residential properties.
As of September 30 2017, the company had 220 million square feet of office space globally. Blackstone has made its presence known in Seattle in recent months. On September 13, 2017, in one of the year’s largest commercial sales, the company bought the Exchange Building, a 22-story 384,302 square foot commercial property located Downtown for $156.5 million from Boston-based Beacon Capital Partners.
The office market in Snohomish County has been experiencing some fluctuations over the last few months. According to a fourth quarter 2017 Seattle Office Market Report written by Kidder Mathews, the Northend office market lost occupancy in fourth quarter 2017: negative net absorption was -53,716 square feet, which increased the 2017 total to negative 218,027 square feet. The Northend office market vacancy rate at the end of 2017 was roughly 7.6 percent, up 30 basis points over the year, according to the report. The main source of this figure was due to additional loses in the Bothel submarket. Boeing’s regional downsizing contributed to this figure, with the company vacating over 100,000 square feet of space a year prior to lease expiration.
The Bothell submarket ended 2017 with a 12.9 vacancy rate, while the Everett CBD vacancy rate was 6.9 percent at year-end and the Lynnwood/Edmonds submarket had a vacancy rate of 5.2 percent, according to the report. The report also states how the Northend submarkets continue to attract smaller office tenants looking for a combination of affordable office space and good proximity to lower cost housing for its employees.