Industry sources tell GlobeSt.com that Shorenstein essentially replaces Wright Runstad as EOP's 50-50 partner, but they add that Wright Runstad still owns a nominal stake and that EOP holds preferred equity which, in the event of a sale, would result in EOP having a much larger equity interest. According to EOP's annual report in March, EOP holds a 75% equity interest in the asset that it values at $342.5 million. Given that figure, the overall asset would be valued at $456.66 million, or about $378 per sf.
Built in 1988, the granite and glass tower is Shorenstein's first foray into the Pacific Northwest. The building is encumbered by a $79-million mortgage for which EOP is responsible. Wright Runstad will continue to manage and lease the building, according to Shorenstein.
"Seattle is an intriguing, improving market and one we have been tracking for some time," says Shorenstein chief executive Doug Shorenstein. "We believe that the fundamentals of the local market are going to continue to improve, making this a very attractive investment."
The building's anchor tenant is Washington Mutual, which is expected to vacate a little over 200,000 sf next year when the bank moves its headquarters to a building it is developing at Second Avenue and Union Street. However, about 80% of that space will be backfilled by the law firm Davis Wright Tremaine, which in May 2004 agreed to relocate its headquarters to 170,000 sf on floors 17 to 24 after Washington Mutual moves out.
Once the moves take place, DWT will be the third largest tenant in the building. The law firm Perkins Coie will be the largest tenant in the building, with 270,000 sf, and Washington Mutual will continue to occupy a little more than 200,000 sf in the building.
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