Vulcan Real Estate sold one of its South Lake Union buildings Thursday for more than $106 million, public records show.
The company sold its building at 401 Terry Avenue North to Los Angeles-based Kilroy Realty. Built in 2003, the office and life sciences building is fully leased to the Institute for Systems Biology, a non-profit biomedical research enterprise.
This is Kilroy’s second deal in a year with Vulcan: Last year it bought the 319,000-square-foot Westlake/Terry building across the street from Vulcan and Group Health for $170 million.
“They’re putting their flag in the ground in South Lake Union,” said Lori Hill, managing director for capital markets at commercial real-estate brokerage JLL, formerly called Jones Lang LaSalle, which was not involved in the sale.
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While Kilroy has experience with life-sciences buildings, Hill said, the 401 Terry Avenue North building’s large open spaces have the potential for conversion to premium office space, too.
“You walk through it and it looks very much like space a high-tech company would want to be in,” Hill said. “It’s got that unique flexibility.”
According to commercial real-estate data provider CoStar, the building has 145,923 rentable square feet. That would mean the building fetched $727 a square foot.
“It’s a great piece of real estate and one of the best real estate markets in the country,” said Dan Dahl, senior vice president at Colliers International, who was not involved in the deal.
Dahl said it’s difficult to compare the deal to the regional record price of $745 per square foot paid last year for 202 Westlake by German investment group GLL Real Estate Partners. That was an office building, Dahl said, while 401 Terry Avenue North is a life sciences building with higher-value laboratory infrastructure.
“It’s like comparing an orange to a tangerine,” he said. “It’s kind of an office building but it’s really an office building on steroids.”
Vulcan said it plans to invest the sale proceeds in further development in South Lake Union. Over the past decade, the company said, it has delivered 5.2 million square feet in 25 new office, biotech, residential and mixed-use projects.
Sanjay Bhatt: 206-464-3103 or firstname.lastname@example.org On Twitter @sbhatt