The low-key Seattle office building that's home to the Bill & Melinda Gates Foundation has been sold to a California investment firm specializing in properties for biotech...

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The low-key Seattle office building that’s home to the Bill & Melinda Gates Foundation has been sold to a California investment firm specializing in properties for biotech companies.

Alexandria Real Estate Equities bought the 1551 Eastlake Building from Washington Holdings for $29 million Monday, real-estate records show.

The deal expands the company’s already significant presence next to developer Paul Allen’s growing biotech hub in the South Lake Union neighborhood.

The sale won’t affect the Gates Foundation, which is looking for a site near downtown Seattle to build a headquarters campus. The world’s largest private philanthropy is likely to stay put until construction of the first phase of its campus is finished.

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Alexandria has become one of the city’s key players in the small but important market for biotech-related properties. It owns eight buildings totaling more 700,000 square feet, regulatory filings show. That clouts means it competes head-to-head for tenants with Allen’s company, Vulcan.

“[Alexandria] will keep them [Vulcan] honest,” said Washington Holdings executive Ric Anderson. “I don’t think anyone else in the country is better at bioscience facilities.”

Based in Pasadena, the publicly traded company owns more than 100 buildings in nine states, mostly around the biotech hotspots in San Diego, Boston, Washington, D.C., and San Francisco.

Alexandria first bought laboratory space in Seattle in 1996, renovating the Fred Hutchinson Cancer Research Center’s first home at Seattle Life Science Center on First Hill.

Alexandria’s highest-profile deal recently was the $52 million purchase of ZymoGenetics headquarters in 2002. Seattle’s oldest biotech company sold three buildings, including the Seattle City Light steam plant, to raise cash. ZymoGenetics leased back the properties for 15 years.

Alexandria also bought another Washington Holdings property — the 1616 Eastlake Building — for $34.7 million in 2003. Begun as an office building during the high-tech boom, the property was transformed by Washington Holdings into lab space during construction.

The 167,000-square-foot building was empty when Alexandria closed the deal. It is partially leased by two organizations: Accelerator, a partnership between venture capitalists and Leroy Hood’s Institute for Systems Biology; and the “Hutch.”

That deal helped launch Washington Holdings, which was formed when Anderson and several local executives split from Los Angeles pension-fund adviser Lowe Enterprises. The company is backed by the Washington State Investment Board, the state’s large public-pension fund.

Anderson said the sale of the 42-year-old 1551 Eastlake Building was a bit emotional.

Under Lowe, Anderson bought the property in 1998 for $3.65 million. At the time, the building was a vacant, windowless hulk that had served most of its life as check-processing facilities for banks. Records show the company spent about $12 million on renovations.

“The pensioners can feel pretty good about the deal,” Anderson said.

Exactly what Alexandria plans to do with the building is unclear. The company declined to comment on the sale until the deal is officially announced in a federal regulatory filing in February.

The building’s design is ill-suited for labs but could be offices for nearby biotech companies.

Developers have struggled recently to fill vacant lab space around Seattle. While supply has grown as companies such as Amgen move to new buildings, demand for existing space has lagged. Few startup companies are expanding, while established players such as Corixa have laid off employees.

But Joel Marcus, Alexandria’s chief executive, is optimistic.

“Our history in Seattle goes back a number of years, and we believe since Day One that Seattle has one of the richest bioscience clusters … in the nation.”

J. Martin McOmber: 206-464-2022 or mmcomber@seattletimes.com