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Urban Renaissance and Miller Global JV Buys Office Complex in Bellevue for $80.5MM

Vulcan Real Estate, Bellevue, Seattle, Puget Sound, Eastside city, Eastside Office Market Overview, The Broderick Group,
Downtown Bellevue

By Jon Peterson

Seattle-based Urban Renaissance Group and Denver-based Miller Global Properties have formed a joint venture to acquire the 292,150 square foot Lincoln Executive Center office complex in Bellevue for $80.5 million, or approximately $275 per square foot, according to public documents.

The two buyers did not respond to several phone calls seeking comment for this story. The seller of the complex was Boston-based Beacon Capital Partners. It didn’t respond to inquiries for this story, either. The listing agent on the sale was Eastdil Secured.

Urban Renaissance will continue to be the local operating partner on this property going forward. Most of the equity for this transaction was supplied by Miller Global for one of its institutional commingled funds.

The property has seen a lot of leasing activity over the past three years. Since 2013, there has been 261,000 square feet of new and renewal leases signed for the property. This has brought up the occupancy of the property to 97 percent.

Over the past 12 months, starting rents at the property have grown by approximately 20 percent to $23 per square foot on a triple-net basis. Despite this recent increase, Lincoln Executive Center still represents a significant discount to the central business district of Bellevue, where leasing office space carries as much as a 50 percent premium when accounting for higher base rent, operating expenses and parking costs.

The four-story office complex was first developed in 1984. It has five major tenants in the property. The tenant with the most space is Samsung Telecom America. This company occupies 20.1 percent of the property space, or 58,606 square feet. Its lease expires in January of 2020. The other major tenants are Intermedia.net, Agilysys, Quality Business Systems and CDM Smith.

There is a potential development opportunity for the new owners in the future. The city of Bellevue is in the process of adopting new zoning for the Eastgate area, which promotes mixed-uses and increased density, concentrating on the areas proximate to Bellevue College and the Eastgate Park-and Ride. Both of these are within one block of Lincoln Executive Center. The upzoning will allow for additional development potential at the property.