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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.

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