SEATTLE-Those who follow @GlobeStcom on Twitter and @GlobeStLIVE may have seen a post teasing the announcement, but GlobeSt.com has learned that locally based Hudson Pacific Properties Inc. has entered into a purchase agreement to acquire an office and retail property known as “Merrill Place” located in downtown Seattle's Pioneer Square submarket. The property is directly adjacent to the company's First & King property.
The property is being acquired in an off-market transaction from a joint venture between Angelo Gordon, Nitze-Stagen and Mile Rock Capital for a gross purchase price of approximately $57.7 million (before closing costs and prorations). The acquisition is expected to be completed in February 2014.
The company intends to implement an extensive repositioning of the property, including lobby and common area upgrades, new tenant amenities, an elevator modernization, mechanical and electrical upgrades. Additionally, current zoning for the property allows for the potential development of a new office building fronting the soon to be improved Alaskan Way waterfront.
According to the firm, it plans to start the entitlement process immediately to allow for delivery of the new office building by 2017.
Merrill Place consists of four interconnected brick and beam buildings spanning an entire city block and comprising approximately 179,000 square feet of office and ground floor retail, along with a 147-stall standalone parking structure. The property is currently 93% leased with approximately 52% of the leases scheduled to expire over the next four years. The Company estimates that in-place rents are approximately 22% below current market rents.
“We are very pleased to announce this opportunity to increase our footprint in the Pacific Northwest,” says Victor J. Coleman, chairman and CEO of Hudson Pacific Properties Inc. “The acquisition of Merrill Place represents an excellent opportunity for Hudson to expand in one of the fastest growing submarkets for technology tenants in Downtown Seattle and leverage our operational, leasing and development expertise to create value through an extensive repositioning and re-development of the property.”
The Eastdil Secured group of Wells Fargo Securities LLC advised Hudson Pacific Properties and the seller on the transaction. According to records GlobeSt.com has found, Nitze-Stagen & Co. Inc., a private investment firm and one of the JV sellers, purchased the full city block of buildings in 1997 just prior to the building being vacated by its major office tenant, Adobe Systems.
The company recently also revealed the pricing of an underwritten public offering of 8.25 million shares of common stock pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission at a public offering price of $21.50 per share. The offering is expected to close on January 28, 2014 and is subject to customary closing conditions. The underwriters have been granted a 30-day option to purchase up to an additional 1.24 million shares at the public offering price, less the underwriting discount.
Hudson Pacific Properties estimates that the net proceeds from this offering, after deducting underwriting discounts (before other transaction costs), will be approximately $170.3 million, or $195.8 million if the underwriters exercise their option to purchase additional shares in full. According to a prepared statement, it intends to contribute the net proceeds from this offering to its operating partnership, which will use the net proceeds to fund the acquisition of Merrill Place, development and redevelopment activities, potential acquisition opportunities and/or for general corporate purposes.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
