LaSalle Investment Management has closed on the acquisition of 202 Westlake, a six-story, 131,000-square-foot, class-A office building located along Westlake Avenue in the heart of the South Lake Union neighborhood of Seattle.
202 Westlake was developed in 2013 as a multi-tenant building catering to technology and life science users. The building’s office component is fully occupied by Amazon, and the balance of the property is leased to four ground-floor retail tenants, including Chipotle Mexican Grill, Umpqua Bank, Kigo Kitchen and Homegrown.
“202 Westlake presented a great opportunity to be in the epicenter of South Lake Union, an area that attracts highly sophisticated corporate tenants, with companies in the tech, software and healthcare industries, following Amazon’s lead to join the burgeoning tech hub in recent years,” said Erick Paulson, managing director of acquisitions at LaSalle. “The building benefits from a prime location along a major thoroughfare that offers compelling lifestyle amenities and convenience for all modes of transportation. The downtown Seattle market is driven by rapid growth in the tech market, along with strong economic and labor performance — all factors that make this market one of LaSalle’s target markets for core assets.”
Rental rates at the property at the time of acquisition present mark-to-market opportunities, and the weighted average remaining lease term is nearly 10 years. The building’s tenants offer considerable financial strength, with each having made substantial capital investments in their spaces.
“202 Westlake represents a tremendous opportunity to increase our exposure to high-quality, mixed-use office assets, with stable credit quality, in one of LaSalle’s target markets,” said Steve Lieb, portfolio manager at LaSalle. “With in-place rents trending on the conservative side of the market, the property offers long-term upside potential. The amenity-rich location, high credit-quality tenant roster, and durable income profile make this asset an attractive investment.”
On-site amenities at 202 Westlake include subterranean parking, bike storage, showers, lockers and quick-service food retailers. The building is centrally located in the heart of South Lake Union, offering an amenity-rich, walkable area that boasts high-quality dining, nightlife and retail options in direct proximity, including Whole Foods, which is situated just one block away. The adjacent Belltown neighborhood offers a number of high-end residential developments that are highly sought among area workers.
Amazon signed the three largest office leases of the first quarter 2018, taking 317,000 square feet of new space and renewing another 106,000 square feet in South Lake Union, according to Cushman & Wakefield.
Amazon continues to drive the Seattle office market, occupying more than 10 million square feet in the Seattle CBD, with a goal of reaching 14 million square feet by 2022. In January, the company released a shortlist of 20 finalists for “HQ2”, its second North American headquarters, with the winning city to be announced later this year. Google, Facebook, and Expedia will add more than 2.9 million square feet of class A inventory to the market when their respective campuses deliver in the next two years.
