There's a lesson to be learned from the recent purchases of two commercial office towers in Seattle and Bellevue.
Northwest Mutual purchased the former WaMu Center in Downtown Seattle for a reported $115,000,000. For that Northwest Mutual got a 4 year old, 42 story tower with 890,000 sf of space.
In Bellevue, the 2 yr old Expedia Tower sold for $168,000,000 which includes 20 stories and 413,000 sf of space.
How was Northwestern Mutual able to get twice as much space for $53,000,000 less? Easy. WaMu Center's first sizeable tenant will be Northwestern owned Russell Investments. Prior tenants (Washington Mutual) were blown out by the finance crisis. On the other hand, Expedia leases 85% of Expedia Tower and is currently near full occupancy.
Note to Landlords: Don't lose tenants.
Note to Investors: Team up with a potential owner/occupant. If you can fill up half the space, the rest is almost free.
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