It's big news that Columbia Center reportedly is going up for sale, but it's not surprising.
It's a classic real estate move based on getting out while the going's good. Big buildings, including the 76-story Columbia Center, are filling up, sending rents upward. At the same time, commercial real estate investors have voracious appetites for assets in the Seattle market that has some of the strongest job growth in the nation.
Citing an unnamed source with knowledge of the matter, Bloomberg reported that tower owner Beacon Capital Partners is working with commercial real estate brokerage Eastdil Secured on the sale. Contacted by the Business Journal Wedensday, a Beacon representative declined to comment.
"Beacon is pretty smart. It shows the market is still very hot as I don't believe they would put it out there if it's not the right time to get the right price," said Brian Hatcher, an executive vice president of Seattle-based commercial real estate company Kidder Mathews.
Beacon is the latest owner of a big office building to shift from holding assets to selling them. Commercial real estate experts are anticipating a rush to market for several big assets. Metropolitan Park East and West - the big buildings along Interstate 5 in Seattle that locals call the Twin Toasters due to their boxy shapes and shiny exteriors - already are for sale. So are the Seattle Trade & Technology Center, which houses Zulily's (NASDAQ: ZU) headquarters, and Trulia Center in downtown Bellevue.
The region notched a little over $2 billion in office sales in 2014 with the pace of investment activity accelerating at the end of the year. During the fourth quarter, sales activity among institutional investors - pension funds, real estate investment trusts, insurance companies and the like - hit $750 million, according to a report by commercial real estate company Colliers International.
Beacon was among last year's sellers, disposing of two downtown Bellevue office buildings for nearly $186.4 million. It was the third biggest deal of 2014, and the price was 19 percent higher than what Beacon sold the buildings for in 2007.
Tom Pehl, a senior vice president in the Seattle office of global brokerage CBRE (NYSE: CBG), last month said he expected 2015 sales volume will exceed $2.5 billion, but could climb higher if one or more high-profile properties hit the market.
If Beacon is ready to sell Columbia Center, which at 1.5 million square feet of space is the region's biggest building in the region, that volume will almost certainly increase.
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