Downtown Seattle Office High-Rise Changes Hands

Union Investment sold the 20-story Millennium Tower, which also includes high-end condo residences. The property last traded in 2003, for $64.8 million.

Millennium Tower in Seattle
Millennium Tower in Seattle

A property fund managed by TH Real Estate has purchased Millennium Tower, a 20-story, 201,371-square-foot office building in downtown Seattle, it was announced on Friday by the seller, Union Investment, of Hamburg, Germany.

The property located at 719 Second Ave. is reportedly fully occupied and had been a part of Union Investment’s portfolio since 2003, about two years after it was completed. According to Yardi Matrix data, Union Investment paid roughly $64.8 million to Beacon Capital Partners for the asset 14 years ago.

The tower is LEED Gold-certified and its largest tenants are cloud computing provider Skytap and law firm Van Ness Feldman. Only the lower 14 floors are office space; the top six floors consist of residential condominiums.

A spokesperson for TH Real Estate confirmed to Commercial Property Executive that the selling price is not being disclosed.

The transaction was executed by Union Investment’s New York–based investment team, advised by CBRE. The CBRE team was led by Executive Vice President Todd Tydlaska and Senior Vice Presidents Tom Pehl and Lou Senini.

A stronger waterfront

Millennium Tower sits just a few blocks from commuter rail lines and waterfront transportation, putting it “at the center of major commuter activity between the waterfront and Seattle’s downtown neighborhoods,” Andrew Pyke, regional Head of Northwest Investments at TH Real Estate, said in a prepared statement. “We believe that the dramatic future redevelopment of Seattle’s waterfront will strengthen tenants’ desire to be in in close proximity to the waterfront and further enhance the attractiveness of the submarket.”

The waterfront redevelopment Pyke referenced is officially the Waterfront Seattle Program, and it aims to transform Seattle’s central waterfront, in part by removing the Alaskan Way Viaduct and thus easing access to the waterfront. The program will also include a rebuilt Elliott Bay Seawall, 20 acres of new and improved public space, and new Alaskan Way and Elliott Way surface streets.

As currently scheduled, the project will begin its major phases in mid-2019 and be substantially complete by mid-2023.

Coupled with strong growth dynamics, Seattle as an investment market still offers both global and domestic investors a stable environment for achieving long-term sustainable returns. Seattle, and the surrounding region, will remain of interest for Union Investment as we look to further grow our core portfolio in the U.S. in the near term,” Willis Kim, who’s responsible for Union Investment’s investment management activities on the West Coast and Canada, said in the statement.

Image courtesy of Union Investment