By Jon Peterson
Seattle-based Vulcan Real Estate has sold the 317,800 square foot Amazon Phase VIII office building in Seattle for $246.8 million, according to sources that are familiar with the transaction. The property is located at 325 9th Avenue North.
The buyer of the property is a real estate fund formed by South Korea’s Mirae Asset Global Investment Company. The investor was advised on the transaction by Seattle-based Metzler Real Estate.
The listing agent on the sale for the seller were two real estate service companies. One of these was the CBRE Seattle office, and one of the people involved in the sale was Tom Pehl, a senior vice president of institutional properties. Kevin Shannon, who works out of the Los Angeles office of Newmark Grubb Knight Frank was also part of the deal. Pehl declined to comment when contacted for this story.
The property was acquired with a mixture of equity and debt. There will be some debt provided in the deal by financial institutions in the United States.
The cap rate on the transaction will be in mid four percent range, according to sources familiar with the transaction. This return is based on the property’s current net operating income. The property is 100 percent lease to Amazon. The building as completed in the summer of 2015, and the lease with this tenant has another 14 to 16 years left to run. This tenant occupies all of the 312,805 square feet of office space. There also is 4,637 square feet of ground floor retail. The tenants in this part of the property is Eltana and Hurry Curry of Tokyo.
The acquisition by Mirae Asset will be its first office asset acquisition on the West Coast. It does own the Fairmont Hotel in San Francisco for which it paid $450 million in November of 2015. Its other assets in the United States include 225 West Wacker in Chicago, 1801 K Street in Washington, D.C. and the Fairmont Orchid hotel in Hawaii.
The sale of Phase 8 represents the second Amazon property in Seattle that Vulcan has sold in a little more than half a year. In December of 2015, it sold the 395,000 square foot Phase VI for $300 million. Amazon Phase VII is now out in the market for sale. This property totals 319,000 square feet.