By Jon Peterson
Houston-based Weingarten Realty Investors has expanded its presence in Seattle with its purchase of the retail space at 2200 Westlake Avenue in Seattle. “This is a market and property that we like very much. Seattle is an area that has very strong barriers to entry, which can make things frustrating at times but also is a benefit to owning assets in the market,” says Drew Alexander, president and chief executive officer for Weingarten.
He declined to comment on the actual cap rate that the $65 million transaction produced. “I would say that property like the one we acquired in Seattle would likely trade at a mid to four cap rate initially and would have some good growth to it in the future,” said Alexander.
“This is a market and property that we like very much. Seattle is an area that has very strong barriers to entry, which can make things frustrating at times but also is a benefit to owning assets in the market”
Weingarten bought the property in Seattle in a joint venter with Amsterdam-based Bouwinvest, a Dutch pension fund manager. This relationship also owns one other asset in the Seattle market. This is the 84,000 square foot Queen Anne Center shopping center in the Queen Anne sub-market that is anchored by Metropolitan Market grocery store.
This venture is looking to buy existing core and core plus shopping centers that are anchored by grocery stores. Most of the activity for the venture has been on the West Coast, including a property in Scottsdale, Ariz. The owners are planning to own the properties in the venture on a long-term basis.
Weingarten does own one other property in the Seattle market on its own. This is the 65,000 square foot Whittaker Shopping Center in West Seattle. This is a new development project that was started last year. Its anchored by a Whole Foods, and the center should be open for business sometime in 2017. The amount invested in this mixed-use development by Weingarten is $30 million. This project also has retail on the ground floor and apartments above it that are owned and developed by Lennar.
The sale of 2200 Westlake was originally started from contact by the previous owned, Seattle-based Vulcan Real Estate. “When we first started talking we thought that there might be a swap of properties with us buying 2200 Westlake and selling to them Promenade 23 in Seattle. Once we got a little farther along in the negotiations, we felt it would be best to make them two separate transactions,” said Alexander. Weingarten did sell Promenade 23 for $30.9 million to Vulcan.
2200 Westlake has Whole Foods as its anchor tenant with it taking up 47,400 square feet of the property. The other 26,400 square feet is occupied by a variety of other tenants. Some of these include Bank of America, Starbucks, Federal Express and Westlake Cleaners. The property had no vacancies at the time of the sale.
Vulcan was the original owner of 2200 Westlake. “Vulcan had developed the property in 2006. The pricing that we were able to achieve was very compelling and the proceeds will help advance our broader investment goals in the Puget Sound region,” said Lori Mason Curran, director of real estate for Vulcan. The property was a direct deal between the buyer and the seller, and the asset was not widely marketed or listed for sale.