Sobrato Cos. Buys 201-Unit Dexter Lake Union

SEATTLE-Sobrato Development Cos. of Cupertino, CA, is the new owner of Dexter Lake Union, an 11-story apartment building here delivered in late 2003 and is still in lease-up. The seller was the developer, a joint venture of Opus Northwest and Holland Partners. The sale price was about $40.4 million, according to public records.”This transaction is part of a market trend we are seeing where investors are increasingly willing to buy Class A properties in prime urban locations during the lease-up period,” says broker Mary Ann King with Chicago-based Moran & Co., which had the disposition assignment. “In this case, the property was 45 percent leased at the close of sale.” Located on the west side of Lake Union in the 1200 block of Dexter Avenue North, the U-shaped building sits on four-levels of parking. The development includes 5,910 sf of retail and commercial space that is 100% leased to Starbucks Coffee, Taco Del Mar and Holland Partners. The residential units include studio, one- and two-bedroom apartments ranging in size from 383 sf to 1,235 sf and offering views of Lake Union. The average market rent at the time of sale was $1,484 per month. Sobrato’s David Lee says Dexter Lake Union offers a core in-fill location in an area that is now gentrifying. “With the transformation of the South Lake Union District driven by Paul Allen, the property’s proximity to existing jobs in downtown Seattle and its outstanding mountain, water and skyline views, this was a very attractive investment opportunity,” says Lee, who handled the acquisition.Allen’s development company Vulcan Inc. owns some 50 acres in the district that it plans to redevelop into some 10 million sf of office and research space for the biotech industry. Already this year, more than 1 million sf of office and R&D space has been delivered in the district. The space will house, among others, Merck & Co., the Seattle Biomedical Research Institute, Children’s Hospital and the Fred Hutchinson Cancer Research Center. Sobrato owns 10 million square feet of office, R&D and manufacturing space throughout the Silicon Valley and approximately 7,000 apartment units in California and Washington. Opus Northwest is a locally headquartered division of Minneapolis-based Opus Corp., which currently has more than 26 million sf planned or under development. Vancouver, WA-based Holland Partners has initiated the development of 1,000 multifamily units in five projects in California and Washington State since 2000, and now manages more than 4,000 units through its subsidiary, Holland Residential.