Ivanhoe Cambridge, Callahan Capital Buy 2 Seattle Office Buildings for $280M
- Nov 25, 2014
Ivanhoe Cambridge is expanding its downtown Seattle office portfolio to 2.6 million square feet with the purchase of two adjoining properties, 1111 Third and Second & Spring, for $280 million.
The acquisitions, made with its U.S. partner Callahan Capital Properties, give the Montreal-based firm control of about 13 percent of the downtown Seattle Class A office market.
Ivanhoe Cambridge, the real estate arm of one of Canada’s largest pension funds, did not identify the seller of the two assets, but The Seattle Times reported it that was Walton Street Capital, the Chicago-based private equity firm.
The larger of the two buildings is 1111 Third, a 34-story, 572,000-square-foot Class A office property that was recently renovated. Significant capital improvements included upgrading the lobby and storefront, installing new building systems and adding a new fitness center, according to a statement from Ivanhoe Cambridge. The building, which has views of Elliott Bay and the Olympic Mountains, has a six-level underground garage.
Second & Spring, located at 1100 2nd Ave., is an adjoining five-story, 135,000-square-foot historic building constructed in 1906 and redeveloped in 2013. It has 15-foot-high exposed ceilings, 26,000-square-foot floor plates and large windows letting in natural light, making it attractive to creative tenants.
“1111 Third and Second & Spring are terrific properties that complement our existing ownership stakes in the nearby 999 Third and U.S. Bank Centre buildings,” Adam Adamakakis, Ivanhoe Cambridge’s executive vice president for investments in the United States, said in the statement. “We are well positioned to benefit from the ongoing growth of the Seattle economy and its dynamic underlying industries.”
Tim Callahan, CEO of Callahan Capital Properties, also cited the city’s performance as one of the country’s top economies.
“These properties exemplify our focus on investing in markets with compelling long-term growth prospects and in properties with opportunities to enhance value,” Callahan said .
This acquisition is the seventh Ivanhoe Cambridge has made with the Callahan Capital Properties. To date, the partners have invested nearly $2.7 billion in U.S. office assets. Earlier this month, the partners bought a 40 percent stake in an office portfolio in Denver for $200 million. Properties in the portfolio include the U.S. Bank Tower, the Tabor Center and the adjacent Two Tabor development site, making Ivanhoe Cambridge one of the top landlords in Denver’s downtown, with ownership interest in about 6 percent of the CBD’s Class A office inventory.
In June, the partners bought a 49 percent stake in 330 Hudson, a 16-story, 467,000-square-foot Class A building in the Hudson Square submarket of Downtown Manhattan for $150 million. Ivanhoe Cambridge and Callahan have also made office acquisitions in Chicago, spending more than $360 million on 10 and 20 Riverside Plaza in the West Loop submarket in December 2013.