By Jon Peterson
Germany-based Union Investment Real Estate GmbH has paid approximately $330 million or $884 per square foot to acquire the 373,000 square foot Midtown21 office building in downtown Seattle, according to sources with direct knowledge of the transaction. Public records indicate the sale came in at $330.2 million. The property is located at 1007 Stewart Street.
The pension fund real estate manager acquired the property through the services of Seattle-based Metzler Real Estate.
The cap rate on the transaction was in the low four percent range. This return is based on the property’s current net operating income.
The seller of the property was New York City-based MetLife and its development partner, the Seattle office of Trammell Crow Company. Tom Woodworth, a principal in the Seattle office for Trammell Crow, declined to comment when contacted for this story.
The listing agent on the sale of the property was the capital markets team for the Seattle office of CBRE. This firm declined to comment when contacted for this story.
“Midtown21 is one of the most prestigious newly constructed office buildings in the Denny Triangle submarket and makes an ideal addition to our US portfolio,” said Matthew Scholl, Head of Investment Management Americas at Union Investment Real Estate GmbH in a statement. “In Midtown 21’s lead tenant, we have a truly global company with very strong ties to the city of Seattle who has not only played a significant role in boosting the economic growth of the country, but of the entire region.”
All of the space in the office building has been leased to Amazon. The tenant signed a long-term lease for this property in November of 2016. Work on its space is still on going. The anticipation is that Amazon will be moving into its space at some point later this year. The office building was completed in December of 2016.
Situated at the corner of Stewart Street and Terry Avenue, the building is in the heart of the Denny Triangle neighborhood. The total area of the site is just over 20,000 square feet. The tower itself has 373,458 rentable square feet, according to Trammell Crow’s web site. The building features 19,200 square foot floor plates, high performance, energy efficient glazing and finished ceiling height of 10 feet. The property also includes 4,000 square feet fitness facility complete with a wide choice of workout equipment, showers and lockers.
“Seattle’s Denny Triangle is already a first-class submarket,” said Willis Kim, Head of US West Coast and Canada at Union Investment Real Estate GmbH in a statement. “Going forward, the quality of the location will continue to improve, for example through the expansion of the Washington State Convention Center and significant investment in local infrastructure with the extension of the urban rail system.”
Howard S. Wright served as the general contractor on the development, and LMN Architects is the architect of record.