Seattle developer Schnitzer West has put its 1918 Eighth office tower up for sale, three months after it leased most of the 36-story building to Amazon.com.
The building wouldn’t be on the market now but for the fast-growing online retailer, said Dan Ivanoff, Schnitzer’s founder and managing member. “That was a game-changer,” he said.
Also included of Schnitzer’s offering: 818 Stewart, a 14-story building on the same Denny Triangle block.
Together, the two buildings contain about 900,000 square feet of office space that will be 94 percent leased when two pending deals are signed, Ivanoff said.
The buildings were put on the market last week, he said. He anticipates they will be sold by early fall.
Schnitzer doesn’t have an asking price, Ivanoff said. But Bill Pollard, managing partner at Talon Private Capital in Kirkland, said he expects the offers will be “eye-popping… there’s such a demand right now for that type of quality with low risk.”
Investors are competing aggressively for newer, top-tier office buildings with long-term tenants with deep pockets. Schnitzer took advantage of that last year when it sold two Bellevue office projects that are 100 percent leased to Microsoft — The Bravern and Advanta Office Commons — for a total of $650 million.
If anything, the market for such properties is even hotter now, Ivanoff and Pollard agreed.
Schnitzer’s 1918 and 818 buildings were part of a wave of new office projects in greater downtown Seattle that broke ground before — but were finished after — the economy tanked. Nineteen eighteen sat mostly empty for more than a year after its completion; and some observers questioned whether Schnitzer had made a big mistake.
Amazon’s 460,000-square-foot lease — more than 22 floors — changed all that. Now, “I don’t think there’s any question they are going to make a lot of money on [the sale of] those buildings,” Pollard said.
Amazon will start moving into 1918 in July, Schnitzer’s Greg Macdiarmid said. Altogether, the online retailer has leased a total of 2.3 million square feet in South Lake Union and the Denny Triangle, providing a big boost to the Seattle office market.
Historically, Schnitzer hasn’t held its buildings long-term. Ivanoff said the company was negotiating with other prospective tenants at 1918 before Amazon, and originally planned to get the building mostly leased and put it up for sale in mid-2012.
The Amazon lease and growing investor interest accelerated that timetable, he said.
Schnitzer’s buildings join a growing list of downtown Seattle office properties that have come on the market recently.
General Growth Properties of Chicago has listed the 21-story office tower at Westlake Center, and California-based Laeroc Funds is entertaining offers for the historic 27-story Seattle Tower at Third Avenue and University Street.
Eric Pryne: 206-464-2231 or epryne@seattletimes.com