Kennedy Wilson buys $153m Seattle suburb complex from Cerberus
Kennedy Wilson has acquired a 573,000sqft office complex in a Seattle suburb for $153m (€136m).
The complex in the greater area of Bellevue in Washington state was sold by joint venture between Cerberus Capital Management and Talon Private Capital.
Cerberus paid $128m in 2015 for the three buildings, which are leased to Microsoft and Costco, and changed the name from Sammamish Park Place to 90 East.
The off-market transaction represented a cap rate between 8% and 8.25% – based on current net-operating income – according to sources that track office sales in the Seattle market.
Kennedy Wilson used $76m of equity to purchase the property, securing a 10-year interest-only loan for $77m at a fixed-rate of 3.85%.
The 90 East complex was developed in phases between 1999 and 2001 on a 20-acre site.
The complex has a weighted-average lease term of 5.3 years. During the past 12 months, the complex has produced around $13m of net operating income.
Kennedy Wilson now holds ownership interests in office space totaling 1.4m sqft and 10,430 multifamily units in the state of Washington.
Matt Windisch, executive vice president of Kennedy Wilson, said the “high quality office asset” was bought “below replacement cost in an excellent submarket”.
He said: “With two investment-grade companies occupying the building, 90 East offers a strong initial cash-flow yield and the potential to earn attractive long-term risk-adjusted returns for the company.”