A privately held real estate adviser out of Boston has acquired the four-building Crown Pointe office campus in Kirkland for $37 million.
Built in the 1980s, Crown Pointe is along Lake Washington Boulevard Northeast, just north of Highway 520. TA Realty bought the property from Foster City, California-based SteelWave, which operated as Legacy Partners Commercial. Legacy had paid just over $35.9 million for Crowne Pointe in early 2007, according to public records.
Real estate investors have been turning their attention to suburban office properties in recent years. One of the best examples of this occurred this summer, when 20 office buildings across the Eastside sold for a total of $208.4 million.
Suburban office buildings are less expensive than office buildings in downtown Bellevue and Seattle, and this is reflected in lower rents. The trick for landlords is to raise rents but keep the buildings full. Do that, and they'll likely increase the worth of their investments. In the commercial real estate industry, this is known as a "value-added" strategy.
"The suburban office building market is strong among value-added buyers," said Joe Lynch, a broker with Kidder Mathews, the commercial real estate company that negotiated the sale for SteelWave.
The 130,000-square-foot Crown Pointe is 92 percent occupied by companies such as Kawaski, Toshiba and Ceton Corp., a developer of in-home digital entertainment technologies.
In-place annual rents at Crown Pointe average just over $20 a square foot, plus around $9.50 a foot for expenses, such as taxes, building maintenance and insurance, according to Lynch. But asking rents are $25 a foot, plus expenses, he said.
By comparison, the market rents in downtown Kirkland are $30 a foot plus expenses. At Carillon Point, which is about a mile north of Crown Pointe and considered the Eastside's best office space, Lynch said rents are in the low- to mid $40 a foot range, though that includes expenses.
TA Realty will make some upgrades to the property, though nothing is planned now, Lynch said.
Lynch handled the sale with Kidder colleagues Andy Miller, Bob Conrad and Dan Harden.
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