Hudson Pacific, CPP Investments Agree to Acquire Amazon-Leased Office Tower in Downtown Seattle for $625M
SEATTLE — Hudson Pacific Properties (NYSE: HPP) and Canada Pension Plan Investment Board (CPP Investments) have agreed to acquire a 36-story office tower anchored by Amazon in Seattle. The companies plan to form a joint venture to purchase the 668,000-square-foot property located at 1918 8th Ave. for $625 million.
CPP Investments will own a 45 percent interest in the joint venture, while Hudson Pacific will own 55 percent and act as general partner and as property, leasing and construction manager. The seller was not disclosed, but multiple media outlets report J.P. Morgan Chase has owned the property since 2011 when affiliates bought the asset from developer Schnitzer West LLC.
The property is 98 percent leased with an average remaining lease term of 10 years. Amazon is the largest tenant and occupies a majority of the building, which the Seattle-based e-commerce giant dubs the Blackfoot building. The LEED Platinum-certified tower features a multi-level lobby, great room, central conferencing facility and large fitness center.
The office tower is situated in downtown Seattle’s Denny Triangle neighborhood near Hill7, an office tower that Hudson Pacific and CPP Investments purchased in 2016. The property is also near Washington 1000, an office development that Hudson Pacific is building adjacent to the $1.8 billion addition to the Washington State Convention Center.
The deal is expected to close this month. Additionally, the joint venture expects to secure a non-recourse loan for approximately 50 percent loan-to-value from an undisclosed but prominent institutional lender.
Hudson Pacific is a Los Angeles-based REIT with a portfolio of office and TV/film studio properties on the West Coast totaling nearly 19 million square feet, including land for development. The company’s stock price closed on Monday, Nov. 30 at $26.51 per share, down from $35.40 a year ago.
Toronto-based CPP Investments is a privately held investment manager that oversees the fund on behalf of the Canada Pension Plan, which has more than 20 million contributors and beneficiaries. As of Sept. 30, 2020, the fund totaled CA$456.7 billion (approximately $352.25 billion as of Dec. 1, 2020 exchange rates).
— John Nelson