Vestas Investment Management recently sold Safeco Plaza in downtown Seattle to a joint venture led by Boston Properties (BXP) and two other institutional buyers for $465 million. BXP is the largest publicly traded owner, manager and developer of quality office space in the U.S. The purchase of Safeco Plaza marks the company’s entrance into the sizzling Seattle office space for rent market, which is growing quite rapidly — especially in the technology, financial services and life sciences industries.
Built in 1969, Safeco Plaza stands 50 stories tall and consists of more than 715,000 square feet of Class A office space. The building is also LEED-certified Platinum after undergoing a considerable renovation in 2007. Currently, it’s 90% leased, with Safeco Insurance occupying the majority of the total leasable space.
The joint venture is shared roughly equally between BXP and the other two institutional buyers. BXP is the managing member and will also provide leasing and management of the property. The sale was funded, in part, by a new, five-year mortgage secured by the building with a principal amount of $250 million. The interest-only loan carries a variable interest rate equal to the 30-Day LIBOR rate plus 2.2%, with a current effective rate of 2.35%. It matures in September of 2026.
“BXP’s entry into the Seattle market is an important milestone for our company,” said Owen Thomas, BXP CEO. “The acquisition of Safeco Plaza is consistent with our long-term strategy of owning, managing, and improving premier properties in markets with a diverse and growing economic base and a deep pool of prospective tenants with knowledge workers that have a demonstrated preference for high-quality office buildings.”
Located in the heart of Seattle’s central business district, Safeco Plaza is a staple of the Seattle skyline and offers breathtaking views of Puget Sound and the Olympic Mountains. Its elegant glass façade features large windows in all directions for all tenants, as well as central core floorplan layouts that are perfect for flexible layouts to accommodate varying tenant sizes. Local highlights include immediate access to the waterfront, the Link light rail and ferry terminals, as well as a veritable plethora of restaurants, retail establishments and entertainment venues.