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Takenaka Buys Newly-Constructed Tilt49 Office Tower

JV Sells 291,000-SF, Fully Leased Asset for $268.5M
December 20, 2017
Takenaka Corp. (USA) has acquired the Tilt49 office building at 1812 Boren Ave. in Seattle, WA for $268.5 million, or about $924 per square foot, from a joint venture between Seattle-based developer Touchstone Corporation and Des Moines, IA-based Principal Real Estate Investors (PREI).

The newly-constructed, 11-story office building totals 290,573 square feet of class A office space. Touchstone broke ground on the project with Seattle-based ZGF Cotter Architects, Inc. in the fall of 2015, and delivered the completed building to the city's Denny Triangle / CBD submarket in June of this year.

Earlier this year, Amazon pre-leased the entire office space on a triple-net basis through 2033. The property also includes 1,646 square feet of street-level retail that has been leased to Mighty-O Donuts.

"Our NKF capital markets team strategically sourced the buyer via an ad hoc Asia / Pacific roadshow to four countries," said Kevin Shannon, NKF capital markets president, West Coast. "[NKF's] Alex Foshay along with Rob Hannan led the effort. As a result, we identified a strong buyer and achieved record-setting pricing for a Seattle office property."

Shannon notes that the sale marks the buyer's entry into the Seattle office market. Takenaka, out of Japan, is planning on a multi-generational hold for the trophy asset.

Kevin Shannon, Ken White, Rob Hannan, Michael Moll and Tim O'Keefe with NKF represented the seller.

Please see CoStar COMPS #4086770 for additional information on this transaction.

The creative office property boasts access to more than 100 restaurants, 3,000 hotel rooms, 28,000 urban residential units and public transit, according to NKF. The class A market within the Denny Triangle neighborhood has seen a 51 percent increase in average asking lease rates over the last three years, and with the adjacent South Lake Union submarket, its vacancy rate has been hovering under 3 percent for the past several quarters despite the development of more than 3.5 million square feet of new office space since 2014.

The price per square foot for the Tilt49 sale came in approximately $40 higher than the adjacent Midtown 21 office property, also leased to the same tenant, which recently sold to a German investment firm for $330 million, according to CoStar data.
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