Clarion Buys 70% Interest in $364M Seattle Life Science Property

Clarion Partners has purchased a 70% interest in 400 Dexter, a 290,111-square-foot trophy life science asset in Seattle. At $1,255 per square foot, the partial sale represents a gross valuation of $364 million for the property. It is the highest price per square foot for a life science property in Seattle’s history.

400 Dexter is fully leased to Bristol Myers Squibb, the property’s anchor tenant, as well as Alexandria and The Collective, a members-only social club. Newmark co-head of U.S. capital markets Kevin Shannon, executive managing directors Ken White and Rob Hannan, vice chairman Nick Kucha, senior managing director Michael Moll and director Rachel Jones, in conjunction with local leasing team, executive managing directors Jesse Ottele and senior managing director Cavan O’Keefe represented the seller, an affiliate of Alexandria Real Estate Equities, in the transaction.

The deal illustrates the strength of the life science market in Seattle. According to research from Newmark, Seattle’s life science market has better fundamentals than the overall office market with rents at $65 to $80 triple-net annually. Seattle is also leading the nation in STEM jobs with a deep pool of skilled labor and a wealth of educational opportunities. In the first quarter of the year, life science venture funding was up 300% year-over-year.

The strength of the market is not only producing record-breaking sales, like this one, but it is also attracting new investors. In July, Boston Properties entered the Seattle market, agreeing to acquire Safeco Plaza, a 50-story 800,000-square-foot, LEED-platinum certified, class-A office building. The property is expected to have a gross purchase price of $465 million. At the time of the purchase, Boston Properties said that it was bullish on the Seattle market due to job growth in technology and life sciences.

Seattle hasn’t historically been a major life science market. The three major hubs are San Francisco, Boston and San Diego. However, the Seattle-Bellevue market recently ranked in the top ten for life science markets, according to research from JLL. Historically, investors in the sector targeted legacy markets where industry clusters are most long standing, and where a vast inventory of lab properties already exist. But as buyer competition heats up in those markets, development activity has begun to push to secondary cities.