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Seattle's Amazonian Lending Scene

Seattle's Amazonian Lending Scene

The real estate boom in Seattle, one of the country’s fastest-growing cities, is causing many to sit up and take notice. The latest sign? Two of the largest loans (or at least largest CMBS loans) nationally in 2015 were made to Seattle.

Major lenders such Wells Fargo, JP Morgan, Bank of America and Credit Suisse have all made commercial real estate loans to Seattle this year. As well, an increasingly broad and impressive group of high-tech companies like online travel giant Expedia (which is moving its headquarters from its suburban Bellevue campus to Seattle), Twitter (which recently doubled the size of its Seattle engineering office) and, of course, Amazon, Seattle’s biggest employer, are settling in to the largest city in the Northwest. With high-tech employers and a startup culture come the tech-minded Millennials who are demonstrating an increased interest in city living and are now calling Seattle home.

Media reports indicate Seattle is outpacing not just other cities but even its own suburbs, and is expected to see an influx of another 115,000 new jobs and 120,000 residents over the next two decades. So perhaps it shouldn’t be that big of a surprise that the country’s two largest CMBS loans so far this year--$125 million and $123 million –were not in New York City, but in downtown Seattle, according to data from CrediFi.

Both of those loans, which were originated by Goldman Sachs in March and assigned to separate mortgage security trusts, went to the same property: a 43-floor office building at 1000 Second Ave., close to the waterfront and about midway between the Seattle Art Museum and the Sky View Observatory.

The 447,792-sq.-ft. skyscraper, which has a whopping 97.8 percent occupancy rate, is home to several government offices, including the Washington State Housing Finance Commission and local bureaus of the Food and Drug Administration and U.S. Customs and Border Protection. Other tenants include Bear Creek Venture Partners and the digital messaging agency Innovyx.

An even larger loan went to another downtown Seattle skyscraper this year, when German bank Landesbank Hessen-Thüringen, also called Helaba, issued a $169 million loan for 1111 Third Ave. in February. The 34-story building, which has a pedestrian plaza and views of the Olympic Mountains, is home to several companies, including a branch of global reinsurance holding company General Re Corp., a subsidiary of Warren Buffett’s Berkshire Hathaway.

Lending opportunities are still abundant, with refinancing opportunities over the next several years. Do you have questions about loan or property trends you’d like to see addressed in this column over the coming months, or other cities you’d like to see covered? We want to know what you want to know, so drop us a line at [email protected].

Ely Razin is CEO of CrediFi, a big data platform serving the commercial real estate finance market.

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