Schnitzer sells prime space in hot market.
Civica Office Commons, a two-tower office project in Bellevue, is not the tallest or newest office building in the city, but yesterday it became the priciest.
Schnitzer Northwest sold Civica’s six- and eight-story towers for $141 million to Investcorp, a New York investment company.
The price set a record of $462 a square foot for a class A office building in King County — beating Seattle’s IDX Tower sale last year by $51 a square foot. Class A is prime office space in the most desirable locations.
“Once the market had healed back up last year with the Symetra and Puget Sound Energy deals, we knew it was the right time [to sell],” said Dan Ivanoff, managing investment partner at Schnitzer Northwest.
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The sale comes amid a new building boom and the revival of the office market in Seattle and on the Eastside:
Kemper Freeman Jr. kick-started construction of Lincoln Square, a two-tower condo, hotel, office and retail project, and plans to open its hotel and three-story mall across from Bellevue Square in November.
Civica Office Commons, Bellevue: $462 a square foot yesterday
IDX Tower, Seattle: $411 a square foot in December
Elliott Park, Seattle: $398 a square foot in August
5th & Pine, Seattle: $368 a square foot in January
Millenium Tower, Seattle: $325 a square foot in June 2003
Source: Cushman & Wakefield
Wasatch Development Associates of Utah plans to start construction in June on six towers, more than 1,000 condominiums and a mix of retail shops and offices on 10 acres bounded by Northeast Eighth and 10th streets and 106th and 108th avenues Northeast.
Bentall is adding on the upper floors of an office building it capped in 2001 after Puget Sound Energy decided to consolidate its headquarters there.
Equity Office Properties and Wright Runstad dusted off plans to build City Center II, a 34-story office tower.
Safeco spinoff Symetra Financial and online retailer drugstore.com were lured to downtown Bellevue last year by good deals.
After four years of high vacancies, low rents and little new construction, the turnaround over the past year has surprised some real-estate observers.
“Initially, I was amazed when I heard [of the sale], but then I thought there are a lot of good fundamentals about Civica: It’s a quality building with good amenities, has leases signed, parking revenue and good strong retail tenants,” said Tom Bohman, director of Cushman & Wakefield’s Bellevue office.
The buildings, which opened in 2001, are fully leased.
Tenants include Wells Fargo Bank, Morgan Stanley, Seastar Restaurant and Raw Bar, Microsoft and Infosys Technologies.
Prices have started climbing over the past year in Bellevue, with some deals commanding near-record prices.
Last summer, Houston-based developer Hines sold One Twelfth @ Twelfth, a three-building complex in downtown Bellevue, for $284 a square foot.
Investcorp beat out other suitors for the 305,000-square-foot Civica, its first office building in the Pacific Northwest.
The win gives it an “investment window in the Northwest and the chance to do other deals with Schnitzer,” said Bradley Seiden, an Investcorp principal.
Schnitzer plans to partner with Investcorp in other projects and would like to develop 3 million square feet of office, industrial, suburban high-rise and biotech space in the Seattle, Denver, Los Angeles and San Francisco areas.
Kristina Shevory: 206-464-2039 or firstname.lastname@example.org