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Hines Acquires Large Office Asset in High-Performing Bellevue

24 Feb 2015, 5:29 pm

By Alex Girda, Associate Editor

Mega-developer Hines has acquired Civica Office Commons in Bellevue in a deal worth approximately $205 million. The Bellevue office market has consistently over-performed in the past few years, with top assets currently sought after at cap rates lower than 5 percent. With completions also set to go up in 2015 and absorption rates climbing as well, the area’s office market is ripe for investment.

The latest addition to Hines’ Pacific Northwest office portfolio totals 323, 562 square feet of space. Civica Office Commons consists of two office buildings standing six and eight stories, respectively, and connected by a common atrium. The property was developed back in 2001 and offers tenants a considerable amenity package, including a concierge, Seastar restaurant, Starbucks, a Wells Fargo bank branch, hotel-style valet parking, a fitness center with lockers and towel service, as well as state-of-the-art conference facilities.

A testament to the market’s current highs, only around 10 percent of the property is currently vacant. The asset features a number of high-profile tenants on its roster, among them Cornerstone Advisors, MetLife, Microsoft, Morgan Stanley, Waggener Edstrom as well as Wells Fargo Bank.

According to Hines Senior Managing Director Ty Bennion, Bellevue continues to be the region’s strongest submarket. CBRE research shows that at the end of fourth quarter 2014, the Bellevue CBD was the best-performing office market in the greater Seattle area, based on total gross asking lease rates for Class A space. Bellevue’s CBD also ranks high in occupancy and trails only the booming South Lake Union area for office space to be built in the coming years.


Publix Hotel Building to be Redeveloped as Multifamily Property

16 Feb 2015, 6:06 am

By Alex Girda, Associate Editor

Financing is now in place for the redevelopment of a Seattle multifamily property, thanks to Berkadia, which is providing construction funding for the Publix Apartments. The financing provider, a joint venture of Berkshire Hathaway and Leucadia National Corp., worked on behalf of Publix LLC to secure around $26 million. The company is converting a former hotel into a market-rate housing community in Seattle’s Historic International District. The financing was arranged by Vice President Rob Affleck of Berkadia’s Camas, Wash., office.

Berkadia sourced the loan through the U.S. Department of Housing and Urban Development’s and Federal Housing Administration’s 221(d)(4) sub rehabilitation program. It represents the first historic tax credit deal completed by the Seattle HUD office, a press statement announced. Additional terms include a 40-year, non-recourse loan with a 83 percent loan-to-value ratio.

Formerly the Publix Hotel, the property is located at 504 Fifth Ave. S., between S. Weller and S. King streets. Once completed, the redevelopment project is set to bring 125 new residential units, including 60 restored apartments and 65 completely new units. The ground floor of the property will offer a commercial real estate component. An underground parking facility able to accommodate 28 vehicles is also part of the developer’s plan for the Publix Apartments. The property was built back in 1927 and was then converted to affordable housing. It has been closed since 2003.

According to Affleck, “The property offers affordable housing in conjunction with Seattle’s Multifamily Tax Exemption Program, which will enable Publix Apartments to take advantage of a 12-year tax abatement for offering 20 percent of the units to income-qualified residents.”

Dermody Targets Vancouver’s Low Industrial Vacancies

6 Feb 2015, 10:29 pm

By Alex Girda, Associate Editor

Dermody Properties broke ground on its latest venture, an industrial development in Vancouver, Wash. To be called LogistiCenter 205, it is situated on NE 60th Way.

The property is set for a July 2015 opening, and will feature the necessary conditions for tenants dealing with warehousing and distribution operations. Developer Dermody Properties has commissioned a Kidder Mathews team consisting of Tony Reser, Tom Talbot and Scott Murphy to market the property.

When completed, LogistiCenter 205 will be one of the few properties of its kind in the Clark County submarket. The facility will feature 30-foot clear heights, a 130-foot truck court and ESFR sprinkler systems. Its location offers immediate access to the I-205 corridor, a major Pacific Northwest distribution throughway. The property is being constructed by Perlo Construction of Portland, and the architect on the project is Mackenzie.

Phillip Wood, a partner with Dermody’s Northwest Region office, noted that “this market is a highly sought-after one, but lacks available, modern industrial facilities.” The average vacancy rate for Clark County industrial properties stood at 3.7 percent at the end of 2014, the lowest in quite a while. In general, vacancies in Vancouver and in Portland overall are at or near historic lows, according to Dermody President Douglas Kiersey Jr.

Rendering courtesy of dermody.com

Berkadia Finances Three Seattle-Area Self-Storage Facilities

19 Jan 2015, 5:08 am

By Alex Girda, Associate Editor

Berkadia’s Seattle office recently completed $21 million in combined loan financings for three different self-storage facilities. The commercial real estate company arranged the financing for the properties located throughout the Puget Sound area. The borrower is Ray Moore Construction, with the company working with a Berkadia team led by Senior Vice President Louis Weisman. The loans were 10-year, interest only and fixed rate, secured through a major Wall Street lender.

The three self-storage assets are currently under the ownership of Stor More Self Storage, and are located in West Seattle, Burien and Auburn. According to the announcement, the full-term loans have a 4.45 percent interest rate and a loan-to-value ratio of 65 percent. At the time of the transaction, the three facilities had an average vacancy rate of around 5 percent. According to Louis Weisman, the company was able to complete the necessary underwriting and funding process in just 45 days. Berkadia highlighted that the swiftness of the process is mostly due to its expertise in the Seattle-area market.

The storage units available in the three-property portfolio owned by Stor More Self Storage range in size from smaller five-by-five-foot units to larger 10-by -30-foot units. The properties feature temperature control, gated security, heated units and drive-up units, as well as an amenity package including RV stalls, mailboxes and leased commercial space.

KBS Sells One Main Place in Portland CBD

12 Jan 2015, 6:41 pm

By Alex Girda, Associate Editor

KBS Real Estate Investment Trust II sold One Main Place in Portland’s Central Business District for $86.3 million. The waterfront property last traded for $54 million, according to asset manager and KBS Senior Vice President Mark Brecheen. The transaction was brokered by an Eastdil team consisting of Stephen Van Dusen, Jason Flynn and Darwin Rodriguez, on behalf of the seller.

Located at 101 S.W. Main St., the 20-story Class A office building occupies an entire city block and totals 315,133 square feet. It offers modern building systems and a large amenity package that includes a fitness center, showers, a conference center, subterranean parking, a full-service bank, a coffee shop and a café, and bears Energy Star certification. The tower was constructed in 1980; its modern look was designed by renowned architectural firm Skidmore, Owings & Merrill.

According to KBS Regional President Rodney Richerson, KBS Real Estate Investment Trust II put One Main Place through significant capital improvements in 2008. Richerson also noted that “we believe the One Main Place property appeals to a wide range of tenants in industries ranging from technology to finance to legal services and education.”

Image courtesy of cbre.com


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