By Meghan Hall
An office asset on the Eastside has been posted for sale as its current owner-user makes arrangements to move in the near future. The GE Healthcare—also known as the Danaher Corporation building—is on the market, and could provide a solid opportunity for future redevelopment or occupancy upside to investors in the future.
Guidance pricing for the asset was not immediately available, and ownership will consider offers as presented. Located at 1040 12th Ave. NW, the asset features a 53,555 square foot bio/life sciences facility situated on just over four acres of property. Danaher Corporation, a global science and technology firm, acquired the operations of GE Biopharma in 2019 and currently occupies the facility.
Previously, the property had sold in 2018 for $15.7 million. At the time, the property was purchased by Lytle Enterprises, a senior housing and development company based out of Bellevue.
Newmark’s Executive Managing Director Joe Lynch, Senior Managing Director Dan Harden, and Kidder Mathews’ Executive Vice President Andy Miller, are representing the sellers.
Officially, Danaher’s lease is slated to end in May of 2022. However, the firm could be out of the offices as early as June 2021. Currently, the firm pays $17.50 per square foot triple net, according to an offering memorandum obtained by The Registry. Current market rent in the submarket sits at about $28.50 per square foot, triple net. Current NOI on the property is just under $940,000, while projected NOI is more than $1.5 million.
“The Eastside is one of the region’s strongest submarkets for growth in office, multi-family and bio life sciences and because of that rapid growth, rents continue to increase in all of those sectors,” states the offering memorandum.
A development analysis of the property shows that the property could accommodate a 581-unit mid-rise multifamily project, or an 879-unit high-rise residential project. A project of this size would be well supported, noted the offering memorandum, due to the number of new jobs expected in the coming years. There is currently 4.3 million square feet of commercial office space under construction on the Eastside, 97 percent of which is pre-leased. Construction has started on Google’s third phase of its campuses, and the company has purchased another 10 acres of the former Lee Johnson Chevrolet site to accommodate its growth.
Amazon is also expanding rapidly. The e-commerce company leased two million square feet in the second quarter of 2020, increasing their Eastside footprint to 3.25 million. Including future owned development, Amazon is expected to occupy 5.4 million square feet in the coming years.
Facebook, which purchased REI’s former headquarters for $376.6 million, increased its Bellevue footprint to 1.4 million square feet. The firm also holds 1.1 million square feet in Redmond.
“The Eastside market serves as the headquarters to numerous notable companies, distinguishing it as a hotbed for innovation in the business services, software, technology and wireless industries,” explains the offering memorandum. “These companies include Microsoft, Amazon, Google, Facebook, T-Mobile, Nintendo of America and Salesforce. The market continues to attract companies that are looking to expand operations to the Eastside and have a dual region office structure in order to attract talent on both sides of Lake Washington.”
These fundamentals, Newmark and Kidder Mathews believe, will act as an appealing draw for investors not just looking for office space, but multifamily redevelopment opportunities long-term.
As of this writing, Newmark and Kidder Mathews have not yet returned The Registry’s request for comment.