The building, constructed in 1981 at Seventh Avenue and Olive Way, was formerly known as the Marsh & McLendon Building. It wasn't considered part of downtown until the downtown activity began creeping into its neighborhood during the 1990s.
The estimated $70-million sale price was all the more spectacular because seller San Francisco-based Rreef Funds bought the tower for $34.6 million in December 1996. Nearby, Nordstrom and Seattle-based Clise Properties Inc. are developing a 538,000-square-foot office building to be used principally as administrative offices for the Seattle retailer.
The location has improved markedly since 1996, when Rreef Funds bought the tower from G.E. Capital Investment Advisory Group, in what one real estate source called "a leap of faith for them to believe that all these things were going to happen."
But for buyer The Archon Group, based in Irving, Texas, but also a subsidiary of investment banking giant Goldman Sachs & Co. it's no sucker deal. Annual rental in the building in 1996 started at $18 per sf. This week, the tab is as high as $40 pre sf.
"I think that they see a lot of upside with further potential for growth in rents," said Dave Magee, a director in the Seattle office of Cushman & Wakefield. With developable sites in downtown Seattle becoming scarce, brokers many expect development to move aggressively into the Denny Triangle and South Lake Union areas in future years. That would hike the value of 720 Olive even more, brokers said.
"It's a great building," said Dan Dahl, vice president with CB Richard Ellis in Seattle who represented tenants including State Farm Insurance Co. in recent leases in the 720 Olive Building. "The whole wave of development has moved that way."
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