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SEATTLE-Beacon Capital Partners’ $1-billion Capital Strategic III has gone non-refundable in its bid to purchase Union Bank of California Center. Completed in 1973, the 536,356-sf class B office tower is one of the older high-rise buildings Downtown. Jeremy Fletcher, chief executive of Beacon Capital’s regional office in Los Angeles, tells GlobeSt.com that occupancy in the 41-story office tower is in the low 70% range. He declined to discuss the purchase price until the deal closes in mid-October, but local sources suggest the purchase price will be between $170 and $185 per sf, which translates to between $91 million and $99 million. The value-add play will include a “significant repositioning” of the asset of the next several years, says Fletcher. “We want to take advantage of recent developments in the specific area [surrounding the building], including IDX Tower [Seattle's newest office building] and the new library, which is outstanding,” says Fletcher. “We will try to build on the enhancements that have already been made in the area and increase the value of the asset.”Beacon’s local partner in the transaction is local developer Greg Smith of Gregory Broderick Smith Real Estate. Smith could not be reached for comment Thursday evening to discuss his participation; typically, local development partners put up between 5% and 15% of the equity and then receive an earn-out on the back end based on the increase in the value of the property.The seller Chicago-based Walton Street Capital LLC. According to the company’s website, one of its investment funds purchased the building out of a bankruptcy proceeding in 1998 for about $61 million, or $114 per sf. The property will be renamed 900 Fourth Avenue upon the close of the transaction.Beacon Strategic Capital III is believed to be the largest office-focused private equity fund in the US. With another property in Boston also under contract, Union Bank of California Center will be the fund’s third or fourth asset, says Fletcher. The fund is targeting office properties in Seattle; Boston; Washington, DC; New York; Los Angeles; San Francisco; Denver and Chicago. According to the company’s website, the cities were selected in part because they have highly educated work forces and a good number of colleges, universities and teaching hospitals, making them less volatile markets over the long term.

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