The lofty purchase price is a function of the value and quality of the leases in place. Investment-grade tenants Safeco Insurance Co. of America and the University of Washington occupy the entire building on long-term leases. They lease 132,181 sf and 89,475 sf, respectively.
"The credit strength of our tenants…plus their long-term leases peaked the interests of institutional investors," says James Whitney of the selling entity, Roosevelt Commons LLC. "The abundance of capital available for investment-grade properties and low capitalization rates created a favorable selling environment for us."
Roosevelt Commons sits on 1.3 acres along Roosevelt Way, between Northeast 43rd and 45th streets, near both the University of Washington's main campus and the Safeco Insurance world headquarters. The site is near Interstate 5, along Metro bus routes and Sound Transit's North Link light rail, which is due to be completed in 2009.
Pacific Real Estate Partners' Lori Hill had the disposition assignment. The buyer's broker, if any, was not immediately available.
High rental rates and increased absorption have been achieved in the University District submarket due to limited class A space, according to local brokers. A historically low vacancy rate of zero percent for class A buildings in the University District was recorded through the first quarter of 2005, which compares to a 13% vacancy rate in Downtown.
Due to that situation, no comparable properties have traded hands in the U District in the past 12 months. Comparable sales in other submarkets include Civica Office Commons, a class A office complex in Bellevue, which sold for $462 per sf; IDX Tower, a class A office building in Seattle's CBD, which sold for $411.82 per sf; Fifth & Pine, a multi-tenant office and retail project in Downtown Seattle, which sold for $402.49 per sf.
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