Amazon’s HQ in Seattle Sold to — Surprise! — Amazon for $1B

By Scott Baltic, Contributing Editor

Vulcan Real Estate, of Seattle, has agreed to sell to Amazon 11 office buildings totaling 1.8 million square feet in Seattle’s South Lake Union neighborhood at a price of $1.16 billion, Vulcan announced Friday.

The 1.7 million square feet of office space is currently 100 percent leased by Amazon as the major part of its global corporate headquarters. The 100,000 square feet of retail includes eight restaurants and cafes, a branch bank, and a medical clinic.

The sale is expected to close in the fourth quarter.

The nine Class A buildings and two historic renovations were completed between 2010 and 2012 with lease terms of 14 to 16 years. Most of the buildings have earned or are targeting LEED Gold certification.

Except for the first phase, in which it partnered with Schnitzer West, Vulcan has been the sole developer for the headquarters. Although the various buildings are all between Terry and Boren avenues and Mercer and John streets, a Vulcan spokesperson said that the headquarters buildings are not all contiguous (see aerial photo).

The spokesperson also confirmed to Commercial Property Executive that the just-announced sixth phase of the Amazon headquarters is not part of this transaction. <www.commercialsearch.com/news/property-types/retail/amazon-to-expand-again-its-hq-campus-in-seattle/> That project consists of two interconnected buildings, of five and six stories, consisting of 365,000 square feet of office space and 15,000 square feet of street-level retail, along with below-grade parking, a pedestrian galleria and other landscaped open space.

Construction of phase six is scheduled to begin next January, with Amazon expected to move in by early 2015. The lease term is 16 years.

Barely a month ago, Lori Mason Curran, Vulcan’s director for real estate investment strategy, told CPE that the Amazon HQ would be marketed either as a whole or in parts and that she expected a closing by year’s end. <www.commercialsearch.com/news/property-types/office/vulcan-expects-amazon-global-hq–in-seattle-to-sell-quickly/>

As of Monday, no comment was available from Vulcan as to whether other parties besides Amazon had in fact expressed interest in buying all or part of the complex. CBRE was the listing agent, with a team led by CBRE vice chairman Kevin Shannon.

Vulcan has stated that it plans to reinvest earnings from the sale into continued real estate investments, including the redevelopment of the remaining 30 acres it owns in South Lake Union. The developer’s current projects in SLU include a 185,000-square-foot research facility for the University of Washington School of Medicine; Stack House, a new 278-unit, two-building apartment complex; and the rehab of the historic 35,000-square-foot Supply Laundry building into spec office and retail space.

To date, in addition to the Amazon HQ, Vulcan has delivered about 2.8 million square feet in 11 new office, biotech, residential and mixed-use projects on about 25 acres in SLU. It has also developed one hotel, the only U.S. property of Singapore-based Pan Pacific Hotels and Resorts.

In addition, nearly 600,000 square feet of office space is in pre-development in SLU, Mason Curran said last month. Vulcan has no specific master plan for its remaining 30 acres in SLU and plans to develop that land “organically,” she said.