Hines is Buyer of 1001 Fourth; Sale Price to top $150M

SEATTLE-The sale of a 707,000-sf Downtown office building here should close by the end of the month with Hines as the new owner, industry sources tell GlobeSt.com. Original bids for the 50-story building were due toward the end of February.The building is about 15% vacant now but soon will be 40% vacant by the end of the year if no significant new tenants are signed up before that time, according to Officespace.com. The Web site lists 305,000 sf as “available” in the building, including 240,000 sf that is not currently vacant but will be by the end of the year. Most, if not all, of that space is leased to IDX, which has already relocated to its new namesake tower but is on the hook for the lease until it expires at the end of the year.ING Clarion is overseeing the sale on behalf of the New York State Common Retirement Fund, which has owned the building for 10 years. Secured Capital has the disposition assignment. Steve Brunette, the VP of ING’s Seattle office, declined to comment on the transaction until it has closed escrow. Secured’s Stephen Van Dusen did not return a phone call seeking comment.Local sources originally thought the building’s sale price would top out at $210 per sf or $147 million. Now, sources tell GlobeSt.com it looks as if the sale price will come closer to $220 per sf or $155 million. “Even at $220 per sf, you are still at a big discount to replacement cost,” says one local source. “And for a buyer that wants to reposition the asset, in some ways the vacancy is a good thing.”The circa 1969 building is located catty-corner from the city’s new Downtown public library and near the Union Bank of California Building, a similar-aged building that sold for just under $190 per sf in October. Instead of just leasing up the vacant lower floors at gross rates in the low $20s per sf per year, Hines is expected to complement the recent public investment in the area with a multi-million renovation worthy of rents in the mid-to-upper $20s.