Brookfield Properties Completes $264M Ground Sale-Leaseback

Block 16 of The Spring District. Image courtesy of McClure Images

Brookfield Properties has completed a $263.5 million ground sale-leaseback transaction within the Spring District, a 36-acre mixed-use development in Bellevue, Wash., according to King County records.

A buyer affiliated with Union Square Capital Partners purchased 26.8 acres of land housing two office buildings and inked a 99-year ground lease agreement with the seller. The agreement includes a 20-year extension provision. The buyer financed the transaction with a CMBS loan.

Brookfield Properties purchased Block 16 and Block 24, the two office buildings on the sites, for a combined $565 million from developers Wright Runstad & Co., Shorenstein Properties and institutional investors advised by J.P. Morgan Asset Management.

The two office buildings, located at 1288 123rd Ave. NE and 12355 NE District Way, encompass a total of 540,000 square feet and are fully leased to Facebook. The tech giant has also leased 325,000 square feet at Block 6 and has recently announced a 330,000-square-foot lease for the neighboring Block 5, Puget Sound Business Journal reported.

Overall, Facebook has signed leases totaling upwards of 1 million square feet across four buildings within the Spring District, becoming a major driver of the $2.8 billion project. Slated for completion by 2028, the transit-oriented development will add 5.3 million square feet of housing, office space and retail to the area. The East Link extension of the Sound Transit system, which will link the district with 40 miles of light rail in the Puget Sound region, is expected to begin service by 2023.