242,758-SF Office Lease Extends, Expands Boeing at Renton Place

RENTON, WA-The Boeing Co. has taken down a second office building at HAL Real Estate Investments’ three-building Renton Place property and extended its lease for its first building. Combined, the 242,758-sf of lease agreements is one of the largest office leases of the year in the Puget Sound region. Concurrent with the lease, HAL renamed the development Triton Towers and changed the name of One, Two and Three Renton Place to Triton Tower One, Two and Three.

Boeing currently occupies all of the 130,690-sf Triton Tower Two building. In August 2004, it extended its lease for the building, which was to expire this past May, through 2007. This latest extension pushes the lease expiration for that building to 2010 and makes it co-terminus with the new 112,068-sf lease in Triton Tower Three.

The Triton Tower Three lease covers all but the fifth floor of the seven-story building. Geoff Pendergast, who handles leasing for the complex with fellow CBRE broker Ed Hogan, tells GlobeSt.com that Boeing eschewed the fifth floor because there is another tenant on half the floor and Boeing didn’t want to be on an un-secure floor. However, Boeing did negotiate a right of first refusal for the floor when it again becomes wholly available, he says.

Boeing’s lease of Triton Tower Three dropped vacancy in the complex from about 40% to about 10%. About 10,000 sf remains available in Triton Tower Three and about 32,000 sf remains available in Triton Tower One, says Pendergast.

“Boeing had three or four serious alternatives they were looking at and, obviously, in a market with 30% vacancy, the offers were aggressive,” HAL Real Estate VP Brad Lange tells GlobeSt.com. Neither Lange nor Pendergast provided the negotiated lease rate on the deal, but the effective rate is believed to be well below the asking rate for the space, which was $19 per sf on a full-service basis.

Boeing leases more than 1.6 million sf in the greater Seattle area and owns 35.8 million sf in the region, according to its most recent annual report. Urbis Partners principal Cleita Harvey represented Boeing in the Triton Towers lease.

HAL acquired Renton Place in 2001 along with two other Renton properties in a 670,000-sf package deal from Seattle-based Unico Properties for about $83.2 million. The other two properties were Valley Office Park, a four-building, 200,000-sf complex, and Blackriver 800, a 75,000-sf building that was last occupied by Boeing and is currently vacant.

Blackriver is now fully leased to Puget Sound Educational Service District, which began paying rent on a 10-year lease in August, says Lange. Valley Office Park was fully leased until earlier this year, when Hasbro subsidiary Wizards of the Coast vacated three of the park’s 52,000-sf buildings and moved across the street. The other building is leased to the Federal Aviation Administration.

Pendergast says letters of intent have been submitted for more than 100,000 sf and negotiations are underway. In addition, he says all of the buildings are up for sale. The vacant buildings may be sold to owner users or leased up and sold to investors. The buildings are currently available in any combination, including the FAA building. “You could buy one, two, three, or all four and own the whole park,” says Pendergast.