March 27, 2019

Amazon-leased Troy Block project sells for $740M

Photo by Ben Benschneider [enlarge]

Confirming rumors of a pending sale last fall, the Troy Block in South Lake Union has sold for almost $739.9 million. King County recorded the sale on Tuesday.

The seller was TB TS/RELP LLC, a venture of local firm Touchstone (now owned by Urban Renaissance Group) and USAA Real Estate of San Antonio. Touchstone acquired the land from The Seattle Times in 2011 for $18.4 million, then developed it.

The buyer was Ponte Gadea Seattle LLC, which is associated with Ponte Gadea Group of Miami. That's the private investment firm associated with Spanish retail billionaire Amancio Ortega. His publicly traded Inditex fast-fashion group includes brands like Zara, Massimo Dutti, and Bershka.

Holliday Fenoglio Fowler represented the seller. The HFF team consisted of Mark Gibson, Stephen Conley, Manny De Zarraga, Michael Leggett, Gerry Rohm, Coleman Benedict, Kevin Freels, and Logan Green. The property officially went on the market in February 2018. The buyer's representation is unknown. The deal was worth somewhere between $913 and $905 per square foot, based on varying estimates for the two buildings' size.

The 13-story north tower at 399 Fairview Ave. N. has 419,000 square feet of offices, according to Touchstone/URG. The 12-story south tower at 300 Boren Ave. N. has 391,000 square feet. There's also about 5,000 square feet of retail/commercial space, plus underground parking for around 1,000 vehicles.

The LEED gold-certified project was designed by Perkins + Will, and built by Lease Crutcher Lewis. It's managed by Urban Renaissance Group.

The full 2.5-acre block is bounded by Harrison and Thomas streets, and Boren and Fairview avenues North. Amazon calls the buildings Houdini North and South. The complex has an Amazon Go store, a Cascade Coffee Works, and the FareStart food vendors Maslow's and Rise.

The project takes its name from the former Troy Laundry building. Its landmarked facade, and that of the Boren Investment buildings, were preserved on the corner of Thomas and Fairview. Before construction, Touchstone had to clean up the soil contamination left by the old laundry.

The project broke ground in 2014 and was completed in phases from late 2016 into 2017. It officially opened in October 2017.

Real Estate Alert reported in November that Ponte Gadea would buy the Troy Block. In recent years, Ponte Gadea has purchased a Manhattan hotel and an office building in Washington, D.C., in two deals worth $452 million.

Forbes estimates that the 82-year-old Ortega has a net worth of around $62.7 billion. Zara was established by his late ex-wife, Rosalia Mera, who died in 2013. In her obituary, The New York Times said that Ortega, the son of a railroad worker and a maid, left school at 13 to work as a delivery boy for a shirt maker.