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Hudson Pacific Agrees to $57M Fee for Merrill Place in Off-Market Transaction

28 Jan 2014, 5:41 am

By Alex Girda, Associate Editor

Hudson Pacific Properties has agreed to purchase a mixed-use asset in Seattle’s Pioneer Square submarket from a joint venture of Angelo Gordon, Nitze-Stagen and Mile Rock Capital. According to a press statement, the off-market transaction is valued at $57.7 million. The deal is slated to close sometime next month.

The object of the transaction is Merrill Place, a 200,000-square-foot asset located next to HPP’s First & King property. Last renovated in 1998, Merrill Place incorporates four brick-and-beam buildings offering ground-floor retail and office space, occupying an entire city block. Merrill Place also includes a separate parking structure that offers 147 parking stalls. The property currently boasts an above-average vacancy rate of 7 percent, with more than half of its current leases set to expire during the following four years. According to the new owner, the leases currently in place at the newly acquired property are 22 percent under Pioneer Square market levels.

Hudson Pacific is set to add value to the property through a series of improvements, including upgrading the lobby and common areas, updating the elevator, improving the property’s electrical and mechanical features, as well as introducing new tenant amenities to reposition the asset. According to the press statement, current zoning measures will give the owner the opportunity to develop a brand-new office property fronting the Alaskan Way waterfront. Paperwork will be submitted as soon as possible for the entitlement process, with HPP looking to deliver the new construction by 2017. Once upgraded, Merrill Place, as well as the new building that HPP has planned, will cater to the constantly growing tech market, a segment that is driving serious growth in Seattle’s commercial real estate market.

Image courtesy of www.nitze-stagen.com



Vancouver Apartment Community, Portland Industrial Facility Trades Mark Week

21 Jan 2014, 6:01 am

By Alex Girda, Associate Editor

The Pacific Northwest had a good week, with a number of deals closing. Peak Capital Partners purchased The Villas at Bridge Creek, an apartment complex in Vancouver, Wash., from Kingsbury LLC, and CorEnergy Infrastructure Trust Inc. paid $40 million to acquire the Portland Terminal Facility, among others.

The residential community offers 103 units, and at the time of the sale had a vacancy rate of just 4 percent. The new owner sourced the necessary funds for the acquisition through a Fannie Mae loan. Financial terms regarding the purchase fee and the loan were not publicly released. The new owner is now lining up a renovation for The Villas at Bridge Creek, with a focus on exterior improvements. The residential complex offers income restricted rental units with one- to three-bedroom apartments.

The Portland Terminal Facility, a petroleum products terminal, traded in a cash deal. The new owner is set to ink a new triple-net lease for the newly acquired facility to a subsidiary of Arc Logistics Partners LP.

The industrial property offers a number of features that were specifically targeted by CorEnergy in the acquisition process. The features include a multimodal terminal with rail, truck and shipping access points. According to a press statement recently issued by the company, the 39-acre facility has a storage capacity of 1.5 million barrels and capabilities including receiving, storing and delivery of heavy and refined petroleum products. Transportation is facilitated by the presence of the multimodal terminal, with marine access available to ships up to Panamax size.

Image courtesy of www.thevillasatbridgecreek.com



Washington State Convention Center Acquires Nearby Parcels for $56.5M While Pondering Expansion Options

14 Jan 2014, 3:33 am

By Alex Girda, Associate Editor

As the Pacific Northwest continues to grow, the hospitality markets in Seattle and Portland are growing, as well. Now both of the major cities in the area have seen the necessity of a larger convention center in order to cash in on the growing market for large events. Other cities on the West Coast have already begun their moves to expand existing convention facilities and have moved to the format of the hotel-convention center. With an expansion plan in its sights, the Washington State Convention Center Public Facilities District recently completed the purchase of a land site in Seattle’s central business district. The value of the deal stood at $56.5 million, according to The Seattle Times.

The WSCC purchased the former Honda of Seattle property, consisting of five different land parcels located between Ninth Avenue North and Boren Avenue, and Howell Street and Olive Way, from former owner Cassieford Co. of the Auburn. A Honda dealership occupies approximately 86,900 square feet of space. The Honda Center will relocate to Seattle’s Sodo neighborhood, the Puget Sound Business Journal writes. The site offers the Washington State Convention Center proximity to the Denny Triangle, the future home of the much-talked-about Amazon campus. The location is also in the vicinity of a King County-operated transit station.

According to the Times, the WSCC has been discussing expansion plans for more than a year now, and the newly acquired land parcels would offer serious options to that initiative. The possibility exists for an additional 170,000 square feet of space underground for use as an exhibit facility, as well a surface facility totaling 140,000 square feet of exhibit space. The convention center currently comprises two facilities, each offering about 100,000 square feet, a total exhibition space of 205,000 square feet. The cost for the expansion project would stand at around $650 million to 700 million.  

 Image courtesy of wscc.com



AEW Buys Renton Shopping Center from Pearlmark Harvest Lakeshore in Blockbuster Deal

7 Jan 2014, 5:04 am

By Alex Girda, Associate Editor

In a massive retail transaction, a unit of Boston-based investment fund AEW Global purchased a large Renton property Developer Pearlmark Harvest Lakeshore sold The Landing shopping center for approximately $165.4 million. JSH Properties will continue to manage the property.  

Developed in 2008, the shopping center is located on a sprawling 21-acre site and offers customers a host of shopping, dining and entertainment options. Tenants at the facility include Staples, PetSmart, Target, Panda Express, Five Guys Burgers and Fries, Red Robin and Regal Cinemas. One of the anchor tenants for the property is Dick’s Sporting Goods. According to the Puget Sound Business Journal, the occupancy rate at The Landing currently stands at slightly above 90 percent.

Metro Seattle has seen its average vacancy rate for retail dip well below the national average, data from Marcus and Millichap Real Estate Investment Services shows. A strong market combined with a steady completion pace saw vacancy rates stabilize by the end of the third quarter at the 6 percent mark. The company predicted that Metro Seattle’s rate would go even lower by the end of the year, to approximately 5.6 percent. Downtown Seattle averages 3.2 percent, while on the other end of the spectrum Tacoma stands at 8.5 percent.

Chart courtesy of Marcus & Millichap Real Estate Investment Services at marcusmillichap.com



Holland Partners Closes $80M Property Acquisition in South Lake Union, with Plans for M-U Development

23 Dec 2013, 5:01 am

By Alex Girda, Associate Editor

The approved rezoning of South Lake Union, one of the most popular development areas in the much improved city of Seattle, is already paying off. The Puget Sound Business Journal recently reported that Holland Partners, one of the most active development companies in the local market, recently completed the acquisition of a number of properties in the area, and is now eyeing a mixed-use development project. The acquired area was previously targeted as a development site by Equity Office Properties Trust. Holland paid a total of $79.5 million for almost a block between Dexter and Westlake avenues.

The company will now look to come up with a master plan for what was previously set to become the home of an 825,000-square-foot mixed-use project. That project was announced by former owner Equity Office back in 2007, when the project called for office, retail and residential units to be developed at the site, divided across five six-story structures. Westlake Steps, as the canned project was set to be named, was sold to Holland Partners by an affiliate of Equity and parent The Blackstone Group. Blackstone’s involvement came around six years ago, when it acquired a large chunk of the former’s portfolio in a blockbuster $39 billion transaction.

Due to the aforementioned rezoning plan, Holland will be able to build towers as tall as 12 stories. According to PSBJ, the developer does not own the entire block, with other properties not yet spoken for. However, Holland will take into account the feedback of its new neighbors as it tries to come up with a master plan for the area between Westlake and Dexter.



Othello Partners Awaits Design Review on New Rainier Valley Residential Project

19 Dec 2013, 11:51 am

By Alex Girda, Associate Editor

Local developer Othello Partners is once again looking to develop a residential complex, in the vicinity of another high-profile project that the company debuted two years ago. The Station at Othello Park was in itself an ambitious project, announced and developed in a time of uncertainty for the national residential market. Now the company is waiting for design review on Othello Station North, according to the Puget Sound Business Journal.

The project, which will take shape on a 1.9-acre site at 4200 S. Othello St., has undergone some changes from the original pitch, with fewer parking stalls and less commercial space. Othello North will reportedly include just 8,000 square feet of retail space and 234 surface and structured parking stalls, down from the original 17,700 square feet and 372 parking stalls. The chop has also been given to the residential component, which has dropped from 370 to 355 units. That will include four live-work units.

The project calls for L-shaped buildings to be constructed at S. 42nd and S. 43rd streets, with developer Othello Partners lining up the two buildings to be constructed in phases, starting with the structure at S. 42nd Street.

The company is betting big on the area near the Othello light-rail stop in Rainier Valley, as its previous project, the Station at Othello Park, had to see rent rates drop in order to fill up. However, the project’s growing pains were justified, as the apartment community was the first major property of its kind to be developed in Rainier Valley in 40 years.

Rendering courtesy of othellopartners.com



Othello Partners Awaits Design Review on New Rainier Valley Residential Project

13 Dec 2013, 3:43 pm

By Alex Girda, Associate Editor

Local developer Othello Partners is once again looking to develop a residential complex, in the vicinity of another high-profile project that the company debuted two years ago. The Station at Othello Park was in itself an ambitious project, announced and developed in a time of uncertainty for the national residential market. Now the company is waiting for design review on Othello Station North, according to the Puget Sound Business Journal.

The project, which will take shape on a 1.9-acre site at 4200 S. Othello St., has undergone some changes from the original pitch, with fewer parking stalls and less commercial space. Othello North will reportedly include just 8,000 square feet of retail space and 234 surface and structured parking stalls, down from the original 17,700 square feet and 372 parking stalls. The chop has also been given to the residential component, which has dropped from 370 to 355 units. That will include four live-work units.

The project calls for L-shaped buildings to be constructed at S. 42nd and S. 43rd streets, with developer Othello Partners lining up the two buildings to be constructed in phases, starting with the structure at S. 42nd Street.

The company is betting big on the area near the Othello light-rail stop in Rainier Valley, as its previous project, the Station at Othello Park, had to see rent rates drop in order to fill up. However, the project’s growing pains were justified, as the apartment community was the first major property of its kind to be developed in Rainier Valley in 40 years.

Rendering courtesy of othellopartners.com



Seattle’s Tallest Skyscraper Announced; HFF Finances Yakima Valley Retail Properties

10 Dec 2013, 9:52 am

By Alex Girda, Associate Editor

As the city’s development market skyrockets, a big change to its skyline has been announced, with local developer Greg Smith expressing plans to build the city’s tallest building, setting a new bar for new developments in terms of both height and ambition. According to the Puget Sound Business Journal, should the development come to reality, the process would be time consuming as the necessary design approvals and paperwork would take at least a year.

Urban Vision’s plan is to build a 77-story tower in downtown Seattle, a white hot area for office and residential development where the city’s tech appeal has greatly improved the image of the area. The proposed tower would only beat Columbia Center, the current title holder, by just one floor. The location of the skyscraper, according to PSBJ would be the current site of the Metropolitan Grill steakhouse. Greg Smith’s Urban Visions, a privately held local real estate development company, will work on the project with Martin Smith Inc., a real estate investment and management entity, for which Mickey Smith, Greg Smith’s brother, is a principal.

In other real estate news, Holiday Fenoglio Fowler recently announced that it had provided a retail center in Yakima, Wash., with a loan worth $42 million. HFF worked on behalf of CenterCal Properties, the owner of the Valley Mall and Valley Mall Plaza properties totaling 679,845 square feet of space. The regional mall and the retail power center boast a vacancy rate of six percent.

HFF arranged a seven-year, full-term interest-only loan at a floating-rate of LIBOR plus 170 basis points. The two properties’ tenant rosters include names such as Macy’s, Sears, Kohl’s, T.J. Maxx, Ross Dress for Less, Bed Bath & Beyond, Michael’s, Ulta and Old Navy. The property last went through a renovation twelve years ago. The owners will use the funds secured with the help of HFF for the refinancing of maturing debt on the asset.  



65-Year-Old Downtown Portland Office Asset Trades Hands as Local Vacancies Dwindle

2 Dec 2013, 4:44 pm

By Alex Girda, Associate Editor

One of Portland’s landmark office properties traded hands last week when a Unico Properties L.L.C.-controlled investment fund paid $41 million for the downtown asset. The joint venture between Unico and Cigna Realty Investors purchased the Commonwealth Building from seller Commonwealth Acquisition L.L.C. Unico has been the property’s manager, a position it will maintain after the transaction.

The Commonwealth Building is located at 421 S.W. Sixth Ave. in Portland’s downtown area, and has been there for the past 65 years. The office asset is one of the area’s landmarks, its value having already gone up when compared to the fee that current seller Commonwealth Acquisition L.L.C. paid for it back in 2007. According to rentv.com, after paying $27 million for the property, the entity invested a further $7 million to bring the 14-story structure up to date and fit it with modern, environmentally friendly features. The building has since received LEED EB Gold certification from the U.S. Green Building Council and an Energy Star designation for operating efficiently.

The Pietro Belluschi-designed office tower currently has a vacancy rate of 6.9 percent, well below the city’s average office vacancy values. According to data from Marcus & Millichap Real Estate Investment Services, Portland will end the year with an average vacancy rate of 12.1 percent due to positive absorption and a strong demand for space in the area. That’s well below the national average, which the data provider forecasts will be around 16 percent at the end of the fourth quarter.

 Chart courtesy of Marcus & Milichap Real Estate Investment Services.



Planned Legacy Community to Draw on Appeal of Silicon Canal

26 Nov 2013, 2:38 pm

By Alex Girda, Associate Editor

As the tech cred of Seattle continues to grow, the city is witnessing an escalation in the number of residential projects designed and built in order to accommodate the young professionals that will be populating the new office complexes. Among them is a new project by Legacy Partners Residential in the increasingly tech-driven Stone Way area. The company is set to develop its new community near the Google offices there.

Legacy will start construction sometime during 2014 on its planned residential project, according to the Puget Sound Business Journal. The developer plans to build a 276-unit apartment community on a 1.7-acre site located at 3801 Stone Way N. Legacy recently acquired the site in a deal worth $12.3 million. According to the business journal, it is still unclear whether the building will have four or five stories.

Stone Way has seen a growing influx of tech companies arrive and create an image for the area that has earned it the moniker Silicon Canal.

Nearby, another site will become the new, 120,000-square-foot headquarters for Brooks Sports. Such growth in the neighborhood’s job market offers prospects for success of Legacy’s planned apartment complex.   







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