90 North Goes for $117M in Off-Market Deal
Los Angeles-based Preylock Real Estate Holdings recently acquired 90 North, a four-building 256,703-square-foot office campus for $117 million, and the campus is fully occupied by T-Mobile and Mindtree.
BELLEVUE, WA—The Puget Sound office market continues at its whipsaw pace amid another off-market transaction. Los Angeles-based Preylock Real Estate Holdings recently acquired 90 North, a four-building 256,703-square-foot office campus for $117 million. The property is fully occupied by two tenants, T-Mobile and Mindtree.
Newmark Knight Frank’s co-head of US capital markets Kevin Shannon, vice chairman Nick Kucha, executive managing directors Ken White, Tim O’Keefe and Mike Schreck, senior managing director Michael Moll, director James Childress, and associate director Rachel Jones represented the seller. The seller was a joint venture between affiliates of Chicago-based Walton Street Capital LLC and Seattle-based Talon Private Capital LLC.
JLL represented the buyer, Preylock Holdings, in the sale of the property. The JLL capital markets team consisted of Logan Greer, Kevin Freels, Michael Leggett and Gerry Rohm. The buyer partnered with foreign capital.
“Every sector of the Eastside market has changed dramatically in the last 24 months,” O’Keefe notes. “We expect to see considerable foreign and domestic capital continue to pursue every opportunity available.”
Built in phases in 1983, 1986 and 1991, 90 North is situated on approximately 20 acres at 3255, 3265, 3156 and 3067 160th Ave. SE. The campus features an on-site food court, cafe, fitness center, conference facility, courtyard with outdoor seating and recreational activities, and ample surface parking.
“This stabilized campus was sold off market, which is unusual,” said Shannon. “NKF worked with the seller to determine an estimated value range which was met with Preylock’s pre-emptive offer. This is yet another example of foreign capital being attracted to Seattle’s real estate market.”
In November 2017, the NKF team led by Shannon sold the property on behalf of Boeing to affiliates of Walton Street Capital LLC and Talon Private Capital, which acquired the property for $35.75 million as a value-add repositioning opportunity.
“The affiliates of Walton Street Capital LLC and Talon Private Capital did an excellent job executing on their planned capital improvement program on 90 North, and effectively repositioned the campus into a modern creative office environment,” said Moll. “The asset is stabilized with two large users on long-term leases, providing the buyer with a prime office campus in one of the nation’s top office markets.”
Eastgate is the heart of the Interstate 90 suburban corridor which provides prime freeway access, proximity to executive housing, a strong roster of corporate tenants and a low vacancy rate. The property benefits from a location with ingress/egress to Interstates 405 and 90, and shuttle service to the Eastgate Park and Ride. Additionally, the property is 10 miles to Seattle CBD and 4.5 miles to Bellevue CBD.
“Seattle is likely going to set an all-time record for transactional volume in 2019 as sellers beat the new excise sales tax that goes into effect in January 2020,” Shannon tells GlobeSt.com. “As a result, we anticipate a decline in the volume of new offerings in the first half of 2020.”
The Puget Sound office market continued its relentless expansion in the third quarter of 2019, with asking rent and vacancy rates maintaining or surpassing recently established record levels, according to a NKF third-quarter office report. Average asking rents in the region increased by 1.7% in the quarter and by 7.5% year-over-year, up to $39.45 per square foot.
The overall vacancy rate remained at 7.6%, the same as last quarter, but down 110 basis points compared with the third quarter of 2018. The region experienced 1.39 million square feet of net absorption in the third quarter, bringing the year-to-date total to 3.15 million square feet, the most of any market tracked by NKF research. This quarter’s absorption was largely driven by new construction projects, many of which delivered fully leased, such as Google’s Lakefront Blocks and Facebook’s Arbor Blocks, both of which are located in the Lake Union submarket.