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SEATTLE-Kennedy Wilson says it has acquired a Downtown office building and an adjacent residential condominium development here for $300 million in a partnership with its fund, KW Fund I, and investment advisor Rreef. The office building is the former Union Bank of California Building at 901 Fifth Ave. The adjacent condo tower is known by the intersection it fronts, Fifth and Madison. The city’s new flagship library is located on an adjoining block.

The condo tower, which will contain 126 housing units (six units per floor) and 6,422 sf of street-level retail, is under construction. The project is about 70% complete and 66% pre-sold at an average of $631.50 per sf, according to Kennedy Wilson. Completion is slated for October.

The office building, built in 1973, has 41 floors and is currently undergoing its first renovation since 1999. The $35-million makeover will include a new lobby and entrance, upgraded common areas, and a pedestrian-friendly plaza surrounding the building. A completion date for the renovation was not readily available.

Kennedy Wilson says the office building is 58.5% leased. Approximately 85% of the building is being marketed for lease on officespace.com. Depending on the location within the building, the length of the lease and the tenant improvement package, the asking full-service lease rate ranges from $29 to $43 per sf per year. Average class A vacancy in the Downtown market is approximately 9%.

The seller is Boston-based Beacon Capital Partners’ $1-billion Beacon Capital Strategic III, which acquired the asset, including the land for the condo tower, for around $101 million in late 2004 with local partner Greg Smith. The building was 70% leased at the time. Beacon acquired the building from Chicago-based Walton Street Capital LLC, which bought it out of bankruptcy in 1998 for about $61 million.

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