A joint venture between Hudson Pacific Properties, Inc. (Hudson Pacific) and Canada Pension Plan Investment Board (CPP Investments) has signed an agreement to acquire a 668,000-square-foot trophy office tower in Seattle for US$625 million.
CPP Investments will own a 45% interest in the joint venture and Hudson Pacific will own 55% and act as general partner and as property, leasing and construction manager.
The property, known by its address 1918 8th Avenue, is situated in the heart of Denny Triangle proximate to Hill7, which is also jointly owned by Hudson Pacific and CPP Investments. The location is a few blocks from Hudson Pacific’s Washington 1000, a fully entitled Class A office development site adjacent to the Washington State Convention Center Addition.
1918 8th Avenue, the trophy office tower in Seattle, is 98% leased with an average remaining lease term of 10 years and Amazon as its largest tenant occupying a majority of the building. The LEED Platinum certified tower was completed in 2010 and features a multi-level lobby, great room, central conferencing facility and large fitness center.
“Time and again, we’ve had success in growing our portfolio with properties adjacent to existing assets in neighborhoods undergoing positive transformation, and 1918 8th Avenue represents a perfect opportunity to do that once more in Denny Triangle and with our trusted partner CPP Investments,” said Victor Coleman, Chairman and CEO of Hudson Pacific. ”We are also pleased to significantly expand our relationship with Amazon, which now becomes one of the largest tenants within our office portfolio.”
“We are pleased to expand our partnership with Hudson Pacific through the acquisition of 1918 8th Avenue. Hudson Pacific is a leading real estate investor and operator, and this asset presents a compelling opportunity to add a high-quality investment with a strong cash flow profile to our joint portfolio in Seattle,” said Hilary Spann, Managing Director, Head of Real Estate Americas, CPP Investments.
In conjunction with the transaction, the joint venture expects to place a secured, non-recourse loan for approximately 50% loan-to-cost from a prominent institutional lender. The deal is expected to close in the fourth quarter of 2020.