Civica Office Commons Fetches $141M

BELLEVUE, WA-Investcorp International is the new owner of Civica Office Commons in Downtown Bellevue. The New York-based company paid local developer Schnitzer Northwest about $141 million for the two-tower, 305,000-sf development that opened in early 2001. The price equates to $462-per-sf, the highest price ever for a property in the Seattle area. The second highest per-sf sale price occurred in December, when IDX Tower, a much larger building in Downtown Seattle, sold for about $405 per sf.As one of the newer properties, Civica is 100% leased at rental rates higher than most if not all other buildings in Bellevue. Adding to the attraction are the tenants, about 75% of which are public companies. They include Anheuser Busch, MetLife, Microsoft, Morgan Stanley and Wells Fargo. “It has consistently outperformed the market and is well positioned to take advantage of the up part of the real estate cycle,” says Schnitzer Northwest managing partner Dan Ivanoff. In addition to the premium sale price, Schnitzer retains the management and leasing assignments. Investcorp principal Bradley Seiden adds that the two companies “expect to partner in other investments in the future.”Ivanoff says the building was built as a tenant-focused business relocation option. “We researched what tenants wanted in a real estate location, which of those desires they were willing to pay for and built a project that specifically addressed the tenant’s needs,” he says. “We created a value proposition for the tenants versus the commodity real estate that was historically available in the market.”The response proved out the theory. We are applying the same discipline to our new projects as well.”Schnitzer Northwest is currently in design mode for a mixed-use development adjacent to Meydenbauer Center in Bellevue. In addition, it has two high-rise office and three multifamily sites secured in Seattle. Schnitzer is also developing a joint venture program for the acquisition of existing assets. “While we didn’t need to create capital capacity to fund our new ventures, the sale of Civica allows us to redeploy our capital out of a core, highly stable asset into more opportunistic assets,” says Ivanoff. “Opportunistic investment has always been our strategic focus.”Holliday Fenoglio Fowler LP of New York has the disposition assignment for Civica Office Commons. HFF managing director Glenn Whitmore directed the disposition.Civica represents Investcorp’s second acquisition of 2005. The company expects to acquire $900 million in real estate this year, which is about $120 million more than 2004. In addition to real estate, Investcorp focuses on corporate investments, asset management and technology investments.