SEATTLE—South Lake Union has absorbed 4.6 million square feet since 2011, pulling the area's vacancy rate down to 5.4% in the fourth quarter of 2017, according to NKF. During the same period, class-A office rents have risen more than 70% as highly educated tech and medical talent continues to fuel the submarket's economic expansion, due in part to Amazon's headquarters presence.

Other area businesses range from biotechnology and medical research centers. Additional employers in the neighborhood include University of Washington Medicine, Fred Hutchinson Cancer Research Center, NBBJ, Group Health, Seattle BioMed, PEMCO, Seattle Cancer Care Alliance and PATH.

Due to this rate of activity, it's no surprise that office properties are also finding favor with investors. One such property is 501 Eastlake, a 103,494-square-foot five-story building, which just sold to Lincoln Property Company for $58.75 million. The sale represented a $568-per-square-foot sale price.

The seller, LBA Realty, was represented by NKF capital markets co-head of US capital markets Kevin Shannon, vice chairman Pacific Northwest Nick Kucha, managing director Michael Moll, executive managing director Tim O'Keefe and director James Childress.

“The size of this deal in the $50 million to $100 range for a multi-tenant asset was a very attractive deal for capital and created significant bidding depth,” said Shannon. “This is a highly coveted asset in Seattle's most desirable market.”

The unique creative office space provided at 501 Eastlake is quite appealing to tenants. In fact, the property is now 100% leased to a diverse tenant roster including WeWork and the regional headquarters for Capital One.

“A lease for the project's remaining vacancy was negotiated with WeWork during the marketing process which increased the occupancy to 100% for the new buyer,” Shannon tells GlobeSt.com.

The property was built in 2002 and features an on-site athletic facility and abundant walkable amenities. It provides convenient access to Interstate 5 and SR 520 as well as access to South Lake Union streetcar.

South Lake Union is one of the fastest-growing submarkets in the Puget Sound region. During the last three years, $2.84 billion in public and private funds have been committed to its revival, according to the Chamber of Commerce. Once for the city's hub for logging, maritime industries and manufacturing, the neighborhood has been transformed into an enlivened community with parks, open green spaces, water access and efficient public transportation, including the streetcars.

Its residential options are also growing, as builders expand the selection of apartments and condominiums, along with the area's familiar houseboats. And, Lake Union Park is Seattle's newest park. It is the home of the Museum of History and Industry, as well as the Center for Wooden Boats.

Instant Insights /

Tech and Med Tenants Flock to South Lake Union

Related Stories

Recommended For You