Boston Properties Enters Seattle Market With $465M Office Buy
The firm has entered into an agreement to acquire Safeco Plaza, a 50-story 800,000-square-foot, LEED-platinum certified, class-A office building.
Boston Properties has officially entered the Seattle market. The firm has struck an agreement to acquire Safeco Plaza, a 50-story 800,000-square-foot, LEED-platinum certified, class-A office building. The property is expected to have a gross purchase price of $465 million.
Boston Properties plans to purchase the property through its co-investment platform, a $2 billion venture with Canada Pension Plan Investment Board (CPP) and GIC. Boston Properties’ announced the co-investment venture earlier this month, but Boston Properties CEO Owen Thomas made note of the plans on the company’s first quarter earnings call. The venture plans to invest in Boston, Los Angeles, New York, San Francisco and Washington, DC, as well as Seattle, as this most recent purchase illustrates. Boston Properties and CPP Investments contributed $250 million, while GIC is contributing $500 million. With leverage, the investment capacity will total $2 billion. In the Safeco buy Boston Properties plans to own a 51% interest in the property.
Boston Properties is bullish on the Seattle market due to job growth in technology and life sciences. According to the firm, the city was the fastest growing city in 2020 and it is regularly ranked a top technology market.
On the latest earnings call, Thomas described a recent transaction that he felt illustrated the market activity. “In Seattle, 300 Pine, the Macy’s building sold for $600 million or $779 per square foot and a 4.4% cap rate. The majority of this 770,000 square foot asset was recently converted to office space, which is 100% leased by Amazon, and the remainder is undergoing further renovation. The building was purchased by joint venture between a fund manager and a real estate operator,” he said.
Safeco is located in the Seattle’s central business district with a 99 walk score and a 100 public transit score due to its access to both Seattle’s Link Light Rail and Metro Bus Line. The property has views of the skyline, Puget Sound and Olympic Mountains and offers tenants large floor plates. It is currently 90% leased with 17-year average tenure among the property’s largest tenants.