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Hutch Expands in SLU December 20, 2010

Posted by Erik Swanson in Articles, Development, Sale, Uncategorized.
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Fred Hutch Cancer Research Centers expanded their presence in South Lake Union on Friday with the acquisition of a brand new, 177,000 square foot lab and office building for $36 million.  The developer, The Blume Co., was facing foreclosure on the property and owed Keybank $46 million on a construction loan. 

This is the latest Seattle trophy office building sold in the post crash market at below developer cost.  Last month, the 7th & Madison office property developed by Panatonni sold for just over $150 a foot and last fall the Russell Investments Center sold for $129 a foot. At just over $200 per foot, The Hutch purchase is also well below replacement cost. Richard Briscoe of Kidder Mathews appraised the replacement cost for the property earlier this year at $345 a foot.

“Bifurcated market” is now a buzzword being thrown around a lot. And while this is really an owner/user play, this is seemingly the state of our market here in the Puget Sound… investors are seeking the safety of core, institutional quality and “trophy” assets, or the high yield potential of distressed properties.  There definitly remains an absence of similar interest for B and C-class investments as investor’s wariness on the economy continues and the seller-buyer price disconnect makes it challenging for parties to agree on price.

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