Shorenstein Sells Seattle-Area Office Assets
Blackstone and Drawbridge are among the buyers.
Shorenstein Investment Advisers has closed two transactions at The Spring District, a mixed-use property in Bellevue, Wash., developed in partnership with Wright Runstad & Co.
The first transaction witnessed Shorenstein’s controlling interest transfer in Blocks 5 and 6, two Class A+ office properties encompassing 670,000 square feet, to Blackstone. In the other trade, both Shorenstein and Wright sold off Block 13—a 200,000-square-foot asset—to Drawbridge Realty, a KKR partner.
Additionally, Drawbridge Realty also secured a loan of $236.4 million backed by Block 13, according to CommercialEdge information. First American Title Insurance Co. issued the funds.
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Though Meta committed fully to both Blocks 5 and 6, the social media company subleased the entire Block 6 to Snowflake. A similar agreement closed last December, when the data storage company took up Meta’s 773,000-square-foot space in Menlo Park, Calif.
Located along 123rd Avenue NE, the trio is about 11 miles northeast of downtown Seattle. Interstate 405 and Route 520 are roughly 1 mile away, providing access to the Greater Puget Sound region.
Shorenstein and Wright began conceptualizing The Spring District redevelopment back in 2007. The former industrial campus now encompasses 2 million square feet of office and retail space, as well as 800 multifamily units, in addition to a rail station. Plans call for the expansion of the neighborhood by more than 1 million square feet of mixed-use development.
Blackstone and Drawbridge aren’t the only investors that bet on the property. Brookfield paid a total of $565 million for Blocks 16 and 24 at the start of the decade. Then, it closed a $263.5 million ground sale-leaseback for the land occupied by the assets with an affiliate of Union Square Capital Partners.
Seattle’s office investment faces headwinds
Metro Seattle’s office investment volume clocked in at $136 million at the end of April, with assets trading for $120 per square foot, below the national average of $191, according to the latest CommercialEdge report.
Despite the assets’ affordable price tag, the market witnessed solid asking rent growth with the index settling at 5.4 percent in April, the same source shows. Other Western markets struggled in this department, such as the Bay Area (-0.9 percent) and San Diego (0.8 percent).
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