Hines Seeking Buyer for 428,000 SF Leased to Microsoft

REDMOND, WA-At the request of investor partners looking for liquidity, Hines is shopping the best looking girl in its Hines U.S. Office Development Fund. The beauty is Cedar Court, a 428,000-sf, three-year-old development 100% leased to Microsoft and strategically located across the street from software giant’s corporate-owned headquarters campus.

Hines VP Rob Hollister tells GlobeSt.com that while the development didn’t start out as a build-to-suit for Microsoft, it ended up that way, and the structural, mechanical, electrical and telecommunications build out is second to none in the region. With tenant improvements that ran $100 per sf, Hollister says Hines estimates the replacement cost of the development at between $300 per sf and $325 per sf, or between $128 million and $139 million.

Real estate sources tell GlobeSt.com the property should trade well below replacement cost. The industry trade publication Real Estate Alert, without showing its math, recently estimated the 428,000-square-foot property to be worth about $250 per sf, or $107 million, which translates to about 84% of the low end of Hines’ estimated replacement cost.