Real Estate Notebook
Unico still 'very bullish' on Renton market
Puget Sound Business Journal (Seattle) - by Todd Bishop
Unico Properties Inc. found itself in the unusual position last week of selling nearly all its properties in a market where the company sees a promising future.
The occasion was the Seattle company's sale of eight office buildings in Renton to an affiliate of HAL Real Estate Investments Inc. of Seattle. The properties, with more than 670,000 square feet of office space, sold for a total of more than $83.2 million.
An unidentified New York investor that was Unico's partner in the properties prompted the sale of the office buildings when it decided to reconfigure its national real estate portfolio. Unico said the sales were not to be interpreted as a negative comment on the Renton market.
To the contrary, Unico remains "very bullish on that market," said Quentin Kuhrau, the company's senior vice president of investment services. Renton appears poised for additional growth in lease rates and property values, in Unico's estimation. As a result, the company plans to continue looking for properties there.
The buildings sold to HAL included four properties acquired by Unico Properties in March 1998 for a total of $56.5 million. Those were One, Two and Three Renton Place and the Valley Office Park, a four-building complex. Also sold was a fifth property, Blackriver 800, which Unico bought in August 1999 for $7.95 million.
Unico did not sell the Washington Technical Center, a 265,732-square-foot office property it bought in February 2000. The complex, at Powell Avenue Southwest and Southwest Seventh Avenue, is now Unico's sole property in Renton.
Based on Unico's outlook for the Renton market, Kuhrau acknowledged that the values of the properties sold by the company are likely to rise in the coming years. That would have given Unico a strong incentive to continue holding the properties had its partner's needs not dictated otherwise. "I think there is an additional, strong appreciation potential," Kuhrau said.
Those market conditions were one element that attracted HAL to the properties, said Brad Lange, a vice president with the company who specializes in acquisitions and asset management. "We feel that the properties have a lot of built-in upside due to below-market, in-place rents," Lange said. "We're also excited about the long-term prospects for rental growth in the Renton market."
Unico, which leases and manages the University of Washington's Metropolitan Tract in downtown Seattle, also owns and manages properties elsewhere in the Puget Sound region and major office buildings in cities including Boise, Portland and San Francisco. The company will remain the manager and leasing agent for the Renton properties it sold.
HAL Real Estate Investment, based in Seattle, is an investment arm of HAL Holding N.V., the former owner of the Holland America cruise ship line. HAL's properties in the Puget Sound region include Corporate Campus East in Bellevue and the Plaza at Yarrow Bay in Kirkland.
Bentall to sell properties
Bentall Corp. plans to sell five U.S. office properties, including the Millennium Corporate Park and Sammamish Park Place complexes on the Eastside.
The move by Bentall is "part of a strategy to strengthen its balance sheet and recycle capital from mature assets into its development program," the Vancouver, B.C., company announced. Bentall's U.S. affiliate is based in Bellevue.
Sammamish Park Place, at Southeast 51st Street and 220th Avenue Southeast in Issaquah, is fully occupied by Microsoft Corp. The two buildings in the complex include 197,000 square feet of office space. Millennium Corporate Park, which totals roughly 550,000 square feet on Union Hill Road in Redmond, is occupied by tenants including Safeco Corp. of Seattle.
The remaining buildings to be sold by Bentall are in Santa Ana, Huntington Beach and West Los Angeles, Calif. The company put the combined value of the five properties at $560 million.
The decision to put the properties on the market was announced as Bentall disclosed that it is in discussions with its majority shareholder, SITQ Immobilier, that could result in the shareholder taking the company private. Bentall said the two announcements were not related.
TMG buys Mountain Pacific
It's official: Tochterman Management Group has completed its purchase of the two-building Mountain Pacific office complex in Bellevue from Rreef Funds, the San Francisco-based pension fund adviser.
The family-owned firm, which sold its large downtown Bellevue development site to Kirkland-based Schnitzer Northwest in December, paid $18.7 million for the 88,000-square-foot Mountain Pacific property, on Northup Way, King County property records show. The deal closed Jan. 16.
Tochterman officials said upon announcing the deal with Schnitzer Northwest that they would invest proceeds from the sale in a range of institutional-grade properties. Schnitzer is going forward with a $300 million, 1.5 million-square-foot mixed-use development on the former Tochterman site, adjacent to Meydenbauer Center.
Bill Pollard, a principal with Pacific Real Estate Partners, marketed the Mountain Pacific property for Rreef at an asking price of $19.6 million. Rreef bought the property for more than $10 million in 1997.
Kidder bulks up
Kidder Mathews & Segner bolstered its appraisal division, now known as Shorett KMS Valuation Advisory Group, with the addition of three appraisers from the firm of Schueler McKown Keenan & Young. Joining the firm are principals Frank Keenan and Gretchen Young and associate Laurie Grant. Jeff Lyon, Kidder Mathews & Segner's president and CEO, said the additions give the firm "greater capabilities, greater scope and reach in all of our real estate services."
Reach Todd Bishop at 206-447-8505 ext. 112 or tbishop@bizjournals.com.
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