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Keppel-KBS US REIT said on Monday (24 Sept) that it has acquired a business campus consisting of 21 freehold buildings in the Seattle-Tacoma-Bellevue Metropolitan Statistical Area (Seattle MSA) from KBS Strategic Opportunity REIT, Inc for US$169.4 million (S$231.43 million).
Cushman & Wakefield and JLL valued the property at US$178 million (S$243.18 million) and US$181.4 million (S$247.83 million) respectively.
Known as the Westpark Portfolio, the business campus is strategically located in Redmond, the most vibrant Eastside office market in Seattle MSA, where the trust has two other properties, namely Bellevue Technology Center and The Plaza Buildings.
Aside from being close to many amenities like retail shops, Redmond also houses Microsoft and Nintendo, strengthening the area’s appeal as an important tech hub in the US.
“The acquisition of the Westpark Portfolio will strengthen Keppel-KBS US REIT’s foothold in the high growth Seattle MSA. This will allow the REIT to capitalise on strong leasing demand from the technology and professional services sectors in a supply-constrained market, with limited sites available for competitive new development,” said David Snyder, CEO and CIO of Keppel-KBS US REIT Management.
Moreover, Seattle is ranked by Cushman & Wakefield as one of the top-performing office markets in the United States, with office rents expected to increase 4.0 percent by 2020.
“The acquisition is expected to be yield accretive, and is in line with our strategy to acquire distinctive assets in first choice submarkets and create long term value for our unitholders,” noted Snyder.
Since Westpark Portfolio had been acquired by KBS Strategic Opportunity REIT’s unit KBS SOR Westpark Portfolio in February 2016, the business park has seen extensive capital improvements and has undergone repositioning, including the transformation of underutilised space to an amenities centre.
Thanks to the successful rebranding, The Westpark Portfolio has attracted robust leasing demand from tech firms like Oculus VR, Inc, an American tech firm backed by social media giant Facebook.
At present, the property has recorded an occupancy level of 97.7 percent as of 30 June, while the weighted average lease expiry (WALE) reached 4.3 years.
Furthermore, the acquisition of the business campus is expected to boost the trust’s portfolio value by 20.8 percent to US$985.5 million, while net lettable area will rise by 24.2 percent to over 4 million sq ft.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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