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December 15, 2015

One-fifth of this year's Seattle office sales volume went to Asian firms

The Puget Sound Business Journal

Marc Stiles

The impact of Asian buyers on the Puget Sound region's real estate market has been increasing in recent years, but 2015 will be remembered as the year Asian companies had their biggest impact to date.

That's because Gaw Capital Partners, a Hong Kong-based private equity fund, in August paid $711 million for the Northwest's tallest tower, Columbia Center. Gaw followed that up two months later by paying $49.5 million for another downtown Seattle asset, Seattle Tower.

Those two sales alone accounted for 17 percent of the $4.4 billion in Seattle-area office sales that commercial real estate company CBRE (NYSE: CBG) is tracking and expects to close by the end of the year.

Throw in a third deal, last month's $124.4 million sale of the Dexter Horton Building, which sold to Great Eagle Holdings Ltd., of Hong Kong, and Hong Kong firms have spent nearly $885 million buying office buildings in Seattle. This totals one-fifth of all expected office acquisitions in the region this year, based on dollar amounts.

Experts do not anticipate that the weakening Chinese economy will diminish investors' appetite for commercial real estate. If anything, it likely will accelerate it. This is because Chinese investors are looking for a safe place to invest their money, Holly Yang, a Kidder Mathews broker who represents overseas buyers, said this summer.

This doesn't mean Seattle companies will be squeezed out of the action. For its biggest Seattle investment, Columbia Center, Gaw has hired a Seattle real estate company, Urban Renaissance Group, to make what Urban Renaissance officials said will be significant capital improvements in the 76-story building.

The approximately $4.4 billion of 2015 office sales that CBRE is tracking will be the third-highest historically in the region behind 2007's tally of $9.6 billion and 2012's $4.9 billion mark, according to CBRE broker Tom Pehl.

For the full story, go to Puget Sound Business Journal.

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