Hudson Pacific Agrees to $57M Fee for Merrill Place in Off-Market Transaction
- Jan 28, 2014
Hudson Pacific Properties has agreed to purchase a mixed-use asset in Seattle’s Pioneer Square submarket from a joint venture of Angelo Gordon, Nitze-Stagen and Mile Rock Capital. According to a press statement, the off-market transaction is valued at $57.7 million. The deal is slated to close sometime next month.
The object of the transaction is Merrill Place, a 200,000-square-foot asset located next to HPP’s First & King property. Last renovated in 1998, Merrill Place incorporates four brick-and-beam buildings offering ground-floor retail and office space, occupying an entire city block. Merrill Place also includes a separate parking structure that offers 147 parking stalls. The property currently boasts an above-average vacancy rate of 7 percent, with more than half of its current leases set to expire during the following four years. According to the new owner, the leases currently in place at the newly acquired property are 22 percent under Pioneer Square market levels.
Hudson Pacific is set to add value to the property through a series of improvements, including upgrading the lobby and common areas, updating the elevator, improving the property’s electrical and mechanical features, as well as introducing new tenant amenities to reposition the asset. According to the press statement, current zoning measures will give the owner the opportunity to develop a brand-new office property fronting the Alaskan Way waterfront. Paperwork will be submitted as soon as possible for the entitlement process, with HPP looking to deliver the new construction by 2017. Once upgraded, Merrill Place, as well as the new building that HPP has planned, will cater to the constantly growing tech market, a segment that is driving serious growth in Seattle’s commercial real estate market.
Image courtesy of www.nitze-stagen.com