Union Investment has taken advantage of the strong demand for core properties in the US office property market with the sale of its Fremont Lake Union Center property in Seattle, Washington. The buyer is Killroy Realty Corp.
Union Investment has taken advantage of the strong demand for core properties in the US office property market with the sale of its Fremont Lake Union Center property in Seattle, Washington. The buyer is Killroy Realty Corp.
In a statement, the German fund manager said the building was sold for $106 mln (EUR 83 mln), $40 mln more than the original purchase price and some $15 mln above the current expert valuation.
Union Investment acquired the office complex, which comprises around 27,600 m2 of rental space spread over two buildings in Seattle's northern business district, for UniImmo: Europa in 2005. Although the fund’s investment focus is on Europe, the open-ended vehicle has a small exposure to America and Asia to diversify the property assets.
'Investing in Seattle has paid off for our Europa fund - by generating stable rental income during the seven-year holding period and now achieving a good sale price,' said Volker Noack, member of the management board of Hamburg-based Union Investment Real Estate. 'Active asset management enabled us to create the right conditions for a successful sale in a booming market.'
At the time of sale, the Fremont Lake Union Center was 99.4% let. Occupying 61% of the space, Adobe Systems is by far the largest tenant in the building. The lease with the US software company was recently extended by a further 10 years.
UniImmo: Europa has five other properties in the US with a total value of around EUR 900 mln, spread across New York, Washington D.C., Chicago, San Diego and Seattle. This year, Union Investment again plans to take advantage of targeted investment opportunities for the fund in North America. 'Our goal is to reinvest the sale proceeds in the US soon,' noted Noack.