Seattle’s Coveted Spot Gives Rise to Office Demand
Approximately 18 months ago, 901 Fifth Office Tower underwent a transformative multi-million renovation, which was significant in bolstering its competitive position in the local market and attracting a buyer.
SEATTLE—Originally built in 1973, 901 Fifth Office Tower is a 41-story class A, 541,190-square-foot property located at the corner of Fifth Avenue and Madison Street in the central business district. Approximately 18 months ago, it underwent a transformative multi-million lobby, conference center and executive board room renovation, which was significant in bolstering its competitive position in the local market and attracting a buyer.
This fait accompli culminated in Vanbarton Group LLC’s recent $305 million purchase from a partnership of Schnitzer West and Investcorp International Realty, marking its Seattle expansion in order to pursue long-term investment strategies.
Newmark Knight Frank’s co-head of US capital markets Kevin Shannon, vice chairman Nick Kucha, senior managing director Michael Moll and executive managing directors Rob Hannan and Ken White represented the seller. JLL also represented the seller and procured the buyer. Additionally, JLL worked on behalf of Vanbarton to secure the seven-year fixed-rate acquisition loan. The JLL capital markets team representing the seller was led by Kevin Freels, Gerry Rohm, Michael Leggett and Logan Greer. JLL’s capital markets team representing the buyer/borrower included Michael Tepedino and Tom Wilson. The buyer was represented in the sale by HFF.
“Seattle is one of the country’s most coveted office markets for institutional capital, as a result, this asset achieved a significant amount of interest from both national and international firms,” said Shannon. “Vanbarton has followed the tremendous improvement of fundamentals in Seattle and made it a target market, with 901 Fifth representing its first acquisition.”
This demand is resulting in continued rent escalations, making Seattle one of the nation’s highest growth rates, Shannon says.
“Seattle rental rate growth is among the top in the nation for office product,” Shannon tells GlobeSt.com. “Market rents need to be re-evaluated monthly based on the rate of ascent and the velocity of new market-making leases. Supply has not kept up with demand in Seattle which is why so much of the new inventory is preleased.”
Freels concurs with that demand assessment and indicates JLL is also working with investors seeking more Seattle office product.
“The Seattle office market continues to thrive. We are speaking with new capital sources on a weekly basis seeking to establish a larger footprint both in the Seattle CBD and on the Eastside,” Freels said.
901 Fifth Office Tower is LEED Platinum-certified and features upgraded building systems, valet parking and on-site amenities including a fitness center, conference rooms, coffee shop/deli, outdoor plaza with seating and WiFi, and direct access to a full-service Bartell Drugstore. The asset also offers views of the city, Elliott Bay, the Olympic Mountains and Mount Rainier, and is one block from Interstate 5 and the Third Avenue transportation corridor, which houses the Link light rail and numerous bus lines.
The building encompasses nearly a full city block and is fully occupied by more than 40 tenants including Pitchbook, Cray Inc. and Milliman Care Guidelines LLC. Schnitzer West will continue to perform property management services for the tower.