Deka Immobilien Pays $802M for Google Campus

Lakefront Blocks. Image courtesy of Benjamin Benschneider

Vulcan Real Estate has finalized the disposition of Lakefront Blocks, a 635,000-square-foot office development in Seattle’s South Lake Union area. German real estate investor Deka Immobilien paid $802 million—or more than $1,260 per square foot—for the Google-anchored asset.

The high-priced deal didn’t include the two residential towers situated atop of the office buildings.

The property came online in 2019 and has been on the market since September 2021, with each block marketed separately. Newmark represented the seller, while Cushman & Wakefield advised the buyer in the transaction which achieved more than double the market’s average price per square foot last year. In 2021, office sale prices within the Seattle metro averaged $572 per square foot, according to a recent CommercialEdge report.

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This project was the best core office offering on the West Coast in 2021, Kevin Shannon, co-Head of U.S. Capital Markets at Newmark, said in prepared remarks.

Lakefront Blocks. Image courtesy of Benjamin Benschneider

The LEED Gold-certified Lakefront Blocks development comprises two city blocks, situated just south of Lake Union Park. Both Block 31 and Block 25 are composed of two six-story office buildings, designed by Graphite Design Group.

In 2019, Vulcan achieved another record-breaking price with the sale of Arbor Blocks, a 388,900-square-foot, Class A property also in Seattle. Ponte Gadea acquired the pair of Facebook-leased buildings for $415 million.

In late 2020, the German REIT made another significant U.S. office investment, with the purchase of 915 Wilshire, a 388,126-square-foot Class A tower in downtown Los Angeles. A joint venture between Rockwood Capital and Lincoln Property Co. sold the tower in a $196 million deal.

An energy-efficient campus

Block 31 is positioned at 625 Boren Ave. N., on a 1.7-acre plot, according to CommercialEdge. The 433,625-square-foot, 14-story mid-rise offers 313,500 square feet of office space, 9,225 square feet of retail and 79 residential units, situated on the top eight floors. The retail roster includes Tapster and a 203 Degrees Fahrenheit coffeehouse.

The east block (Block 25) buildings rise on a 1.6-acre lot at 630 Boren Ave. N. and are separated by a public alley. The 14-story property offers 148,115 square feet of office space, first-floor retail and 70 residential units on seven stories.

The Newmark team involved in the transaction included Shannon, Vice Chairman Nick Kucha, Executive Managing Directors Ken White and Rob Hannan and Senior Managing Director Michael Moll. Kevin Smith, Gerry Casimir, Bill Burke, Nikki Lam and Tom Weber of Cushman & Wakefield represented the buyer and will assist with the ongoing management of the campus.