Downtown Seattle’s second-tallest building, 55-story 1201 Third Avenue, has been sold for $548.8 million, county records indicate.
It’s the biggest sale in King County so far this year, topping the $480 million that the 42-story Russell Investments Center fetched this spring.
Russell’s buyer paid more on a per-square-foot basis, however,
The sellers of 1201 — a partnership of Seattle developer Wright Runstad, Boston-based Beacon Capital Partners and Shorenstein Properties — put the building on the market this summer.
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The buyer is an entity affiliated with MetLife Real Estate Investments and Clarion Partners.
Wright Runstad built the office tower at Third Avenue and University Street in 1988. It was Washington Mutual’s headquarters for years.
Wright Runstad will continue to manage the 1.1 million-square-foot tower, President Greg Johnson said. Marketing materials circulated this summer indicated the company also hoped to retain a small ownership stake, but Johnson said that didn’t happen.
The price breaks down to about $499 per square foot, about 10 percent less than the Russell Investment Center and several other prime downtown office towers have fetched over the past year.
But 1201 is older, and has more vacant space. About 23 percent of the tower is available for lease, according to commercial real-estate database Officespace.com.
Wright Runstad and its partners decided to sell to take advantage of intense investor appetite for prime Seattle-area properties, Johnson said.
What’s fueling that appetite?
To institutional investors, well-leased commercial real estate looks good right now compared with other potential investments, said Seattle real-estate economist Matthew Gardner.
Seattle’s relatively low unemployment rate and job growth put it near the top of investors’ lists. And they antipate occupancy will remain high and rents will rise, Gardner added.
Institutional investors once ignored Seattle, he said, but “we’re no longer an outlier.”
Eric Pryne: firstname.lastname@example.org or 206-464-2231