The 1918 Eighth Ave. property sold for $350.5 million, or $524 per square foot, and the 818 Stewart building for $129.5 million, or $558 per square foot. The prices are among the highest per square foot paid on the West Coast since the $410 million, $547-per-square-foot sale of the 749,694-square-foot Bravern Office Commons in Bellevue, WA in the fall of 2010—also a Schnitzer West building and also a deal in which Shannon led the brokerage team representing Schnitzer West.

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The factors driving the prices in Seattle include the office market recovery, which is being driven by technology firms like Amazon. “The markets that are leading the office recovery, like San Francisco, the Silicon Valley and Seattle, all have a tech orientation,” Shannon says. “They are turning rapidly, and in Seattle, our research firm (CB Richard Ellis Econometric Advisors) believes the market is going to reach peak office employment levels by next year, which is about as strong as a forecast can get,” Shannon points out.

He adds that buyers in the Silicon Valley, San Francisco and Seattle are using very strong rent growth forecasts, based on their optimism about the recoveries in those markets. In Seattle, the latest CBRE quarterly market report shows that the 97-million-square-foot Puget Sound office market posted its fifth straight quarter of positive absorption in the second quarter. Downtown Seattle is the largest single submarket in Puget Sound, accounting for more than 43 million square feet of the market’s total inventory.

In addition to the office recovery, the sales of the Seattle and Bravern buildings also reflect the strong appetite among institutional investors for quality, stable, core assets, according to Shannon. In Seattle, “We had 36 building tours from 36 different potential buyers, which shows you how much money is out there chasing core assets,” Shannon says. “That is a lot of tours for a deal of this size.”

More than 20 prospective buyers bid on the two Seattle buildings, with pension fund advisers the most aggressive on pricing, according to Shannon. The other bidders included REITs and foreign buyers, with the foreign capital accounting for 25% of the bidders.

Institutional investors have been looking for top-tier assets for some time now, but the recent turmoil in the stock market, and the relative lack of appeal of alternative investments, has core funds even more interested in trophy real estate, Shannon notes. “We're seeing a lot more money come into these core funds because the alternatives, such as the fixed-income and equity markets, just aren't looking as attractive,” he explains.

In the sales of 818 Stewart St. and 1918 Eighth Ave., Shannon led a CBRE team including Todd Tydlaska, Ken White, Dwight Newell and Dan Stutz. The sales of the Seattle buildings are the fourth and fifth significant transactions that Shannon has closed on behalf of Schnitzer West in the past four quarters for a total consideration of $1.19 billion. Until the $480 million sale of the Seattle buildings, the largest office sale on the West Coast this year was the $320 million that a partnership of Morgan Stanley Real Estate Investing and Lincoln Property Co. paid for the 950,000-square-foot Parsons Engineering headquarters in Pasadena CA, a deal in which Shannon represented the buyers.