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German investor buys Seattle Facebook office for $286m

by Andrea Waitrovich

Dusseldorf-based Commerz Real, a real estate arm of Commerzbank Group, has purchased a 345,992-square-foot, state-of-the-art, 10-story, class A office building in Seattle for $286 million.

The sellers were Stockbridge Capital Group and Capstone Partners.

Commerz Real made the purchase on behalf of its open-end real estate fund hausInvest. The U.S.-American RFR Group is the joint venture partner of Commerz Real and will assume asset and property management.

Facebook is the main tenant of Dexter Station, located at 1101 Dexter Ave., with a 10-year contract. The retail areas on the ground floor are rented to Starbucks, Custom Smoothie and the Sandwiches Store Potbelly. The approximately 344,000-square-foot building was built in accordance with the LEED Gold standard and has flexible floor plates ranging in size from about 23,800 to 53,800 square meters.

Facebook has been housing its Seattle headquarters in the building since 2016, investing around $50 million in expanding its office space.

Capstone Partners developed Dexter Station in 2013 with equity and financing from Stockbridge Capital Group.

In a survey conducted by Universal-Investment, German institutional investors are increasingly inclined to invest more in North American office space.

In the submarket of Lake Union, where the Dexter Station is located, technology and media companies have established themselves. A variety of shopping opportunities as well as parks and green areas make it attractive for residents as well.

The vacancy rate in the Seattle/Puget Sound office market ended the first quarter at 8 percent, down 60 basis points from fourth quarter, according to Colliers International. The Puget Sound market enjoyed the 28th straight quarter of positive absorption with 837,076 square feet, slightly up from the first quarter 2016 when the region recorded 812,097 square feet.

26 office properties totaling more than 1.4 million square feet sold during first quarter as total sales volume topped $546 million at an average of $337 per square foot, according to Real Capital Analytics.

A high-priced deal was Urban Union in South Lake Union selling for $269 million ($939 per square foot) to Tristar Capital and RFR Holding. Amazon committed to the full building and the 285,000-square-foot lease commenced in the first quarter.

 

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