By MARC STILES, Daily Journal of Commerce Staff Reporter
Schnitzer West sold two properties on Friday: Advanta Office Commons in Bellevue and the Equinox apartment project in Seattle, for a total of $306 million.
An LLC, Advanta Office Holdings, purchased the 600,000-square-foot Advanta property along Interstate 90 for $240 million. The price works out to $400 per square foot for the building that Microsoft leases.
Equinox is a 204-unit multi-family complex in the Eastlake neighborhood. Public records show the residential portion sold for just over $64.65 million, or $316,940 per unit. When the commercial portion of the building is included, the sales price is $66 million. The buyer is listed as Equinox Apartment Holdings LLC.
It was not immediately clear who is behind the LLCs. State records list the governing person of the Advanta LLC as Douglas Schwartz of Los Angeles. State records list the governing person of the Equinox LLC as Douglas Schwertz, also of Los Angeles.
A Schnitzer West spokesperson said the company signed a confidentiality agreement and could not comment on the sales.
A year ago, Schnitzer West switched the Equinox project from condos to apartments due to the lagging housing market. It was nearly completed at the time.
The Advanta sale is the second Bellevue property that Microsoft leases that has sold this year. City Center Plaza in downtown went for nearly $532 a foot.
The difference in price is attributable to the suburban-versus-downtown locations as well the length of the Microsoft leases, according to commercial real estate experts.
Jim Footh of the Seattle office of the Jones Lang LaSalle said the Advanta lease runs for about another eight years. There are about 14 years left on the City Center Plaza lease.
“The [Advanta] price makes sense to me,” said Footh, who cited the high quality of the property, its location along I-90 and the fact that it's leased to a credit worthy tenant.
“I think the pricing suggests a cap rate hovering around a 7, which once again speaks to the strength of the market for institutional quality product,” said Ann Chamberlin of Pacific Real Estate Partners.
Investors are eager to buy core assets in the Seattle area. Chamberlain said agents and brokers in her office are seeing no fewer than three institutional investors every week with new funds coming to the market.
In May, Dan Ivanoff, founder and managing member of Schnitzer West, told the DJC that his company hired brokers from the CB Richard Ellis offices in London and Los Angeles for advice on whether to sell Advanta and office space at The Bravern in downtown Bellevue. Office space in the 750,000-square-foot Bravern also is leased to Microsoft.
“If the price is attractive, we'll consider selling,” said Ivanoff. “We are getting ready to reload.”
On Friday, Schnitzer officials declined to say whether the Bravern is being sold.
