Tag Archives: buildings

Amazon-Occupied Office Buildings Continue to Set Seattle Sales Records

CoStar Market Insights: Landlords That Rent Space to the E-Commerce Giant in Great Position to Get Leading Dollar When They Offer

Amazon’s Roxanne Building set a Seattle sales record for rates when it was acquired by LaSalle Financial investment Management for $992 per square foot in May.

One special element of the Seattle workplace market is the outsize influence on prices that a single occupant can have. Not surprisingly, in this market’s case that renter is Amazon.

For prospective buyers, office residential or commercial properties in the area are already tough to come by, specifically in locations like downtown and South Lake Union where Amazon inhabits nearly 20 percent of all office space. Because 2010, costs in the market have increased by more than 50 percent and cap rates have compressed by more than 200 basis points.

Lots of possible buyers, consisting of high-end institutional financiers, have been priced out of Amazon-dominated submarkets. Foreign financiers and core institutional investors seem to be more ready to pay the high premium needed to get the very best office homes in a white-hot market like Seattle.

Four current building sales highlight this trend, which increase start in 2015. Union Investment paid $330 million ($884 per square foot) at a 4.4 percent cap rate to acquire Midtown 21 at 1007 Stewart St. in June 2017 from a Metlife and Trammell Crow collaboration. The trophy asset is located in Seattle’s Denny Triangle and is fully inhabited by Amazon. This deal represents the biggest workplace sale in the Seattle market in 2017 and among the greatest costs paid per square foot for the year.

The only other 2017 workplace sales to exceed that one were 2 other Amazon-occupied buildings: Urban Union at 501 Fairview Ave. North that Schnitzer West cost $268.9 million or $924 per square foot to New York-based Tristar Capital and RFR Real Estate; and Tilt49 at 1812 Boren Ave., which sold to Japanese firm Takenaka for $268.5 million or $924 per square foot.

While sales volume in 2018 is off to a much slower start than the previous two years, rates stays high in the city core. To this day, a single sale accounts for a large portion of the total volume.

LaSalle Investment Management paid $130 million ($992 per square foot) at a 4.5 percent capitalization rate to acquire The Roxanne Structure at 202 Westlake in Might. This represents the highest rate per square foot ever paid for a Seattle workplace home.

With structures continuing to command prices like that, there seems plenty of interest by present owners to squander in a hot seller’s market. Inning accordance with a recent Colliers International report, 3 more Amazon office property owners are actively marketing their buildings and anticipated to sell this year. If these deals go through, expect prices to follow recent patterns and maybe even set new records for Seattle.

CoStar Market Insights provides a snapshot of current property trends. The CoStar Market Analytics group keeps an eye on business and multifamily realty throughout 390 city areas, with a granular understanding of the tasks, gamers and economic trends that move these markets.

Learn how CoStar Market Analytics can add to your market knowledge, assisting to decrease risk and make the most of returns.

Google to Obtain 3 More Buildings in Sunnyvale from NetApp for $319 Million

Internet Giant Has actually Now Gotten More Than $1 Billion in Sunnyvale Home Because July

Google Inc. has consented to get three workplace residential or commercial properties in the Silicon Valley city of Sunnyvale, CA, from information management and storage business NetApp, Inc. for $318.7 million.

The residential or commercial properties consisted of in the purchase contract dated Sept. 11 consist of 495 East Java Drive, a 126,760
square foot, four-story office complex constructed in 1999; the 133,021-square-foot 475 East Java Drive; 1330 Geneva Drive, a 121,185-square-foot home, and unimproved land near the structures, according to a Securities and Exchange Commission filing by Sunnyvale, CA-based NetApp.

The deal is expected to close in two stages, with more than $223 million due by Jan. 21, 2018 and the $95.6 million balance payable at a second closing by the end of October 2018. Under the arrangement, NetApp will rent back and continue to occupy among the structures for an undetermined term.

The transaction is the current in a Sunnyvale purchasing spree by Google, which simply six weeks ago took control of ownership of about 50 homes in Moffett Park got on the internet search giant’s behalf by CBRE Global Investors Ltd. for more than $800 million. Google obtained a portfolio of eight Sunnyvale homes from NetApp in April 2016 for $250 million.

In June, Google confirmed that it’s exploring development of an enormous “tech village” totaling at least 6 million square feet on about 250 acres in surrounding San Jose.