New Owner of Safeco Spin-Off Inks 290,000-SF Office Lease

BELLEVUE, WA-The new owner of Safeco’s life and investments business has finalized two, 10-year leases for a total of 289,882 sf in Rainier Plaza and Key Center, two class A buildings Downtown owned by Equity Office Properties Trust. EOP tells GlobeSt.com that the leases, which commence next summer, drop direct vacancy in the buildings to 2.5% and 1.4%, respectively.A holding company formed by Warren Buffet’s Berkshire Hathaway Inc. and Bermuda-based White Mountains Insurance Group Ltd. closed on its $1.4-billion acquisition last week and renamed the company Symetra Life Insurance Co. As part of the acquisition, the new owners had to move the business unit off Safeco’s Redmond, WA campus. In Rainier Plaza, the new company is taking floors three through 15, enough space to warrant EOP changing the name of the building to Symetra Financial Center. In Key Center, it is taking all of floors 16 and 17 and chunks of the first and sixth floors.Parker Ferguson of Flinn Ferguson Corp. Real Estate represented Symetra in its lease negotiations. Ferguson was not immediately available for comment. EOP declined to reveal the negotiated lease rate, but local office brokers familiar with the transaction tells GlobeSt.com the negotiated start rate is in the “high teens” per sf. Current annualized full-service asking rates in the buildings range from $24-$26 per sf at the 430,000-sf Rainier Plaza and $27-$29 per sf at the 473,000-sf Key Center.Given a total inventory of about 4.6 million sf, the two leases drop Bellevue’s Downtown class A vacancy rate–22.8% at the end of June–by about 6.3 percentage points. For a full-floor user, however, the market is much tighter. One veteran local office broker tells GlobeSt.com that there are now just three, full-floor availabilities Downtown.”This deal dramatically changes the landscape (in Bellevue),” one veteran local office broker tells GlobeSt.com. “A month ago, asking rates were in the $24 range and larger, longer-term deals were being negotiated down into the high teens. Now asking rates are up into the $26-$27 range and maybe could be negotiated down into the low- to mid- $20s.”Vacancy at EOP’s 353,000-sf One Bellevue Center also is on the decline. The engineering firm Parametrix moved last month from Kirkland into about 35,000 sf at One Bellevue Center, and the online chemical sales firm ChemPoint earlier this month committed to leasing 27,000 sf in the building. As well, EOP is reportedly close to signing drugstore.com to a 60,000 sf lease in the building, which has about 140,000 sf of availability.