The once-struggling Redmond Technology Center office building is worth 90 percent more than it was only two years ago.
On Monday, Ascentis Real Estate Partners said it bought the five-story property at 18300 Redmond Way, near the headquarters of Microsoft (Nasdaq: MSFT). Public records put the price at $30.25 million. Washington, D.C.-based Ascentis bought the property with another privately held real estate company, Transwestern of Houston.
The story of the property mirrors the recent history of the Eastside office market. Two years after the building was completed in 2008, the lender took the 101,725-square-foot building back from the developer, and the property was sold a couple times.
Menlo Equities of Palo Alto, California, acquired the mostly vacant building for just over $15.9 million two years ago, and started upgrading it to lure tenants.
Last fall, a fast-growing tech company called Pushpay leased one of the floors, significantly boosting the occupancy rate. Today, the building is 92 percent full, according to Joe Lynch, a broker with real estate services company Kidder Mathews.
Office rents in the Redmond have increased around 15 percent in the last two years, said Lynch, who helped lease up the property. He then worked with fellow Kidder brokers Andy Miller, Bob Conrad and Dan Harden on the sale on behalf of Menlo Equities.
Tenants are attracted to Redmond by rents that are lower than what landlords are charging in Kirkland and Bellevue, according to Lynch.
"The Redmond office market has dramatically changed," added Scott Davis, a broker with CBRE. He said companies that want to be near Microsoft struggle to find space.
The Redmond office vacancy rate is 7.6 percent versus 11 percent for the overall Eastside market, according to Davis.
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