Hudson Pacific Properties Inc. announced several major acquisitions. In the largest transaction, the firm entered into an agreement to acquire a four-building, 836,419-sq.-ft. office portfolio in Seattle, from Spear Street Capital for approximately $367.6 million (net of certain credits and before closing costs). Hudson Pacific will use a combination of available cash, property level debt and its corporate credit facility to pay for the transaction.
The portfolio includes: 505 First Street and 83 King Street, two buildings totaling 472,881 sq. ft. that combine a historic brick and timber structure with a newly constructed property, Met Park North, a 189,762-sq.-ft. building in the South Lake Union submarket and Northview Center, a 173,776-sq.-ft. building in the Edmonds/Lynnwood submarket. The 505 First Street and 83 King Street properties are 90 percent leased, to tenants including Capital One/ING Direct, EMC Corp. and Nuance Communications. Met Park North is 99 percent leased, with Amazon.com Inc. serving as the main tenant through October 2023. Northview Center is 89 percent leased. Tenants at the property include ADP and FEMA. The building faces no significant lease rollovers until 2016.
“We are very pleased to announce Hudson Pacific Properties’ entry into the Pacific Northwest with these compelling assets,” said company Chairman and CEO Victor J. Coleman in a statement. “Seattle has long been a target market for us. We believe the region’s underlying economic fundamentals are among the best in the nation and rival those of San Francisco and West Los Angeles, two of our core markets. The purchase of this sizable portfolio also provides us immediate critical mass in the region, with a beachhead in some of the most vibrant submarkets in downtown Seattle. Importantly, we expect the strong occupany and high quality tenancy to offer stable cash flow over the near term and will be immediately accretive for Hudson.”
The Eastdil Secured group of Wells Fargo Securities LLC advised Spear Street Capital on the transaction.
In a separate deal, closed in May, Hudson Pacific bought 3401 Exposition Blvd., an office property in Santa Monica, Calif., from Watt Investment Partners for $24.7 million, including the assumption of a $13.2 million loan. After a full base building renovation and redevelopment, 3401 Exposition Blvd. will contain 65,000 sq. ft. of state-of-the-art office space aimed at creative companies. The project is scheduled to be completed by the fourth quarter of this year.
Hudson Pacific also entered into an agreement to sell City Plaza, a 333,922-sq.-ft. class-A office building in Orange, Calif., for $56 million, before closing costs. Proceeds from the transaction will be used toward the acquisition of the Seattle portfolio. The deal is scheduled to close on or before mid-July.