CBRE Advises Owner in $39.5 Million Sale of Boutique Office Building in Seattle’s South Lake Union Neighborhood

CBRE announced the $39.5 million sale of 425 Pontius, a 75,267-sq.-ft. boutique office building in Seattle’s South Lake Union neighborhood, to Swift Real Estate Partners (“Swift”). Tom Pehl and Charles Safley with CBRE’s Pacific Northwest-based capital markets team advised the seller, a local private partnership, in the sale of the property. The building is managed by Stephen C. Grey & Associates.

Brad Zampa and Mike Walker with CBRE’s Debt & Structured Finance group is advising Swift Real Estate Partners in securing new, market-rate financing.

Located at 425 Pontius Avenue North, the property includes four stories of office space, surface parking and two levels of underground parking. It was originally constructed in 1982 with a renovation in 2018 of the building’s three-story lobby.

425 Pontius is 60% leased to tenants in the fields of biotech, healthcare, and professional services. Fred Hutch Cancer Research Center is the building’s largest tenant. The location is two minutes from Interstate 5 and four blocks from the Seattle Streetcar line, which connects riders to the Westlake transit hub in downtown Seattle for regional light rail and bus access.

Seattle’s Lake Union submarket led the Puget Sound region in office space absorption—a measure of net leasing activity—in the fourth quarter of 2021. The submarket recorded 138,720 sq. ft. of positive net absorption, according to CBRE research.

“425 Pontius is located in the heart of South Lake Union, one of the best performing submarkets in the United States and where office property sales have averaged over $950 per sq. ft. over the last three years. Companies are eager to be in this district, surrounded by transit options and amenities. With Swift’s plans for renovation, the building is in a strong position to capitalize on that demand,” said Mr. Pehl, executive vice president, CBRE.

Swift announced it plans to reposition the property with a rebrand and full renovation, including an exterior modernization and cosmetic upgrades to the lobby, elevators, and common areas.