By Keith Loria, Contributing Editor
Kennedy Wilson has acquired 90 East, a 573,000-square-foot office campus in Issaquah, Wash., for $153 million in an off-market transaction from Talon Private Capital and Cerberus Capital Management. To pay for the transaction, the company invested $76 million of equity and secured a 10-year interest-only loan for $77 million at a fixed-rate of 3.85 percent.
“We are pleased to expand our presence in Washington by acquiring this high-quality office asset below replacement cost in an excellent submarket,” Matt Windisch, Kennedy Wilson’s executive vice president, said in a prepared release. “With two investment grade companies fully occupying the building, 90 East offers a strong initial cash flow yield and the potential to earn attractive long-term risk adjusted returns for the company.”
Constructed between 1999 and 2001, 90 East consists of three Class A office buildings situated on a 20-acre site in the greater Bellevue area. The property is currently 100 percent leased to Microsoft and Costco with a weighted-average lease term of 5.3 years.
Over the last year, 90 East has produced roughly $13 million in net operating income.
The campus is located nearby numerous Fortune 500 companies, such as Amazon, Starbucks, Nordstrom, and Expedia, and is just 10 miles from the thriving downtown Bellevue.
With the deal, Kennedy Wilson now has ownership interest in 1.4 million square feet of office space in the state of Washington, and an additional 10,430 multifamily units.