July 22, 2015

Vulcan gets $251M for 2201 Westlake

Photo by Chris J. Roberts Photography [enlarge]

American Realty Advisors said it’s rare to get a chance to buy a new building “with high-quality tenants at a ‘Main and Main’ location.”

American Realty Advisors bought the 12-story office and retail portion of Vulcan Real Estate's 2201 Westlake in South Lake Union for $251 million.

The building has 317,000 square feet so that's $792 per square foot. Vulcan said this is the highest price per square foot ever paid for an office building in the Puget Sound region.

The building at Westlake Avenue and Denny Way was developed by Vulcan in 2009, and is fully leased. Office tenants are Amazon.com and the global health organization PATH. Retail tenants include Bang & Olufsen and West Elm.

“We were very pleased by the broad interest we received from institutional investors,” said Ada M. Healey, vice president of real estate for Vulcan Inc., in a press release. “The pricing reflects both the exceptional quality of the asset and the highly desirable characteristics of the Seattle office market.”

Vulcan said it will use money from the sale for new development as well as buying land and properties in the region.

Drew Hess of American Realty Advisors said, “Opportunities to acquire a newly constructed building with high-quality tenants at a ‘Main and Main' location are rare. This purchase secures a fully leased Class A asset at an ideal location and still offers strong rental growth opportunities beyond an attractive risk-adjusted return.”

Hess said 2201 Westlake “checks off all of the boxes”: great urban location, great tenants, new construction and amenities.

Vulcan said the all-concrete building is certified LEED gold and has large floorplates ranging from 22,000 to 39,000 square feet, expansive windows, 14-foot floor-to-floor heights, 336 underground parking stalls, and 23,400 square feet of retail across from Whole Foods.

The mixed-use building also contains 135 units in Enso condominiums that were not part of the sale.

CBRE handled the transaction with a team led by Kevin Shannon and supported by the local CBRE office.

American Realty Advisors is an investment manager to institutional investors and is based in Glendale, California. It has nearly $7 billion in assets under management.

Vulcan said that in the last decade, more than $6 billion has been spent on public infrastructure and private development in South Lake Union, which is a top-tier location for global health and tech firms.

To date, Vulcan has added 5.7 million square feet in 26 new office, biotech, residential and mixed-use projects to the neighborhood.

The company has 600,000 square feet of commercial space under construction for Amazon.com and the Allen Institute for Brain Science, and more projects in pre-development. Vulcan is also doing pre-development work on three sites at Yesler Terrace where it will build about 650 residential units.

Vulcan Real Estate manages nearly $2 billion in real estate assets.