Vulcan Sells Westlake Office Building for $251M

American Realty Advisors announced this week that it had acquired 2201 Westlake, a 12-story office building in the heart of South Lake Union in Seattle, from Vulcan Real Estate. The building, which is home to Amazon and international health nonprofit PATH, traded hands for about $251 million, according to a Seattle Times article. At just over $791 a square foot, the sale sets a record for the highest price paid for a Seattle-area office building, brokers said, topping the $745-a-square-foot paid in 2013 by Munich-based GLL Real Estate Partners for 202 Westlake. CBRE handled the transaction with a team led by Kevin Shannon and supported by the local CBRE office. Vulcan said in a press release that it intends to invest the funds from the property sale toward its continued development efforts, as well as new land and value-add investment opportunities throughout the region.

"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. "The pricing reflects both the exceptional quality of the asset and the highly-desirable characteristics of the Seattle office market."

"Opportunities to acquire a newly-constructed building with high-quality tenants at a 'Main and Main' location are rare," added Drew Hess, Senior Director, Investment Group for American Realty Advisors. "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."

Developed by Vulcan in 2009, 2201 Westlake is an all-concrete 12-story structure with large office floorplates ranging from 22,000 to 39,000 square feet, expansive window lines, 14 foot floor-to-floor heights throughout the building, 336 parking stalls in a five-level subterranean garage, raised- floor HVAC distribution, and 23,400 square feet of high-quality retail space directly across the street from Whole Foods. In addition to office space, the ground floor of the building takes advantage of the location with high-value retail space, currently occupied by Bang & Olufsen, West Elm, Einstein Bagels, and Ann Sacks Tile & Stone. American is acquiring all of the office and retail components of the mixed-use building that also includes 135 residential units known as the Enso condominiums.

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Amazon Paying $1.16B for Global HQ

Last month Vulcan Real Estate announced that it would be putting Amazon.com's 11-building Seattle headquarters on the market; this week, Amazon announced that it would purchase the campus. In what will be the United States' biggest commercial real estate deal so far this year for a single property, Amazon is expected to close on the 1.8 million square foot complex by the end of the year.

"When we originally commenced the disposition process, we did not think Amazon would necessarily be the buyer," said Ada Healey, vice president for real estate at Seattle-based Vulcan. The 11 buildings were built in six phases. "We were fully prepared to have the six phases go to six different buyers."

In addition to the sale, Vulcan also said last month that it would construct two new buildings for Amazon, a $160 million project two blocks west of the existing headquarters that will add 380,000 square feet for Amazon. According to a Seattle Times article, construction of the five- and six-story buildings should start in January, and Amazon should move in by early 2015.

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