By Jon Peterson
New York City-based Vanbarton Group has agreed to acquire the 536,958 square foot Millennium Corporate Park in Redmond. The purchase price will be $215 million, or roughly $400 per square foot, according to sources that are familiar with the sale of the complex.
Vanbarton declined to comment when contacted for this story, and the sale of this property has not closed yet.
TPG, the global investment firm headquartered in San Francisco and Fort Worth, is the seller of the asset. It had selected Eastdil Secured to be the listing agent on the transaction. TPG declined to comment on the transaction. The investment firm had acquired the property in July 2018 for $153.5 million, according to public documents.
The office park is located at 18200 to 18700 Northeast Union Hill Road. This puts it less than three miles from Microsoft’s 10 million square-foot corporate campus in Redmond. The tech giant has a lease in Millennium Corporate Park that covers around 90 percent of the property’s space. The property is essentially a fully-lease asset.
This transaction is another example of major institutional investors looking to acquire office assets with one or just a few tenants with very strong credit. Buildings with some vacancy and multi-tenants are garnering a lot less interest from investors.
The in-place rents in the complex will allow the new owner a way to add value to the property in the future. Rents were at 21 percent below market when the property was put up for sale in August with an average remaining lease term of 4.8 years.
Millennium Corporate Park is an asset that has a total of six office buildings ranging in size from 80,000 to 100,000 square feet. The area near the property has multiple modes of transportation. This includes the Redmond Transit Center, regional park-and-ride facility and two regional light rail stations in downtown Redmond, which are planned to open in 2023.
The Redmond office market is one that has a limited amount of empty space. According to data compiled by CBRE, the direct vacancy rate is 2.8 percent through the third quarter of this year. The total size of the office buildings in the market is 4.1 million square feet.