Dealmaker: Kennedy Wilson Acquires Washington Office Campus for $153M

Kennedy Wilson, Beverly Hills, Calif., acquired 90 East, a 573,000-square-foot office campus with three class-A office buildings near Bellevue, Wash., for $153 million in an off-market transaction.

Kennedy Wilson invested $76 million in equity and secured a 10-year interest-only loan for $77 million at a 3.85 percent fixed rate to pay for the property.

Built between 1999 and 2001 on 20 acres in Issaquah, Wash., 90 East is an institutional-quality office campus fully leased to Microsoft and Costco with a 5.3-year weighted-average remaining lease term. The property is 10 miles from downtown Bellevue, Wash., and close to Fortune 500 companies including Costco, Microsoft, Amazon, Starbucks, Nordstrom and Expedia. The property produced nearly $13 million in net operating income in the past 12 months.

Matt Windisch, Executive Vice President with Kennedy Wilson, noted that the property traded below replacement cost. “With two investment-grade companies fully occupying the building, 90 East offers a strong initial cash flow yield and the potential to earn attractive long-term risk adjusted returns.”

The Puget Sound Business Journal reported Talon Private Capital, Seattle and Cerberus Capital Management, New York, sold the asset, formerly named Sammamish Park Place. The joint venture acquired the property in 2015 from Microsoft co-founder Paul Allen’s Vulcan Real Estate, Seattle, for $128 million.

Kennedy Wilson now has an ownership interest in 1.4 million square feet of office space and 10,430 multifamily units in Washington.