Northwestern Mutual Life Insurance Co. sold the Seattle headquarters of its Russell Investment Group unit for $480 million, the largest deal for a single office building in the western U.S. since 2006.
The 42-story Russell Investments Center was purchased by Los Angeles-based CommonWealth Partners, a closely held real estate investor, Milwaukee-based Northwestern Mutual said in a statement today. It bought the property in 2009 after the collapse of previous owner Washington Mutual Inc., which had its headquarters at the building.
Northwestern Mutual took advantage of investor demand for high-quality, income-producing real estate. Office rents have been rising and vacancies declining in coastal cities such as Seattle, where job growth is outperforming other parts of the country.
“The company’s real estate strategy typically focuses on long-term holds,” Paul Hanson, the company’s managing director for real estate, said in the statement. “However, the Seattle market rebounded quickly, creating an excellent opportunity for the company to realize a gain for our policy-owners.”
The 872,000-square-foot (81,000-square-meter) building is about 95 percent occupied, up from less than 40 percent when Northwestern Mutual paid $115 million for the property, Mark Lucius, a spokesman for the insurer, said in December, when the tower was listed. The building was completed in 2006 at a cost of about $370 million.
CBRE Group Inc., based in Los Angeles, was Northwestern Mutual’s broker.
“There were 34 prospective buyer tours of the asset, which is highly unusual for a deal of this size and demonstrates the tremendous amount of capital that exists” for buildings in central business districts, said Kevin Shannon, a CBRE vice chairman who handled the sale. “This is especially true in rising markets, like Seattle, that are experiencing strong job growth resulting in aggressive rent growth.”
The property -- at 1301 Second Ave., next to the Seattle Art Museum -- is known for its 17th floor garden terrace.
Northwestern Mutual bought the building from JPMorgan Chase & Co. and filled it by moving Russell’s head office from Tacoma, south of Seattle, and adding other corporate tenants. Occupants include JPMorgan Chase, Nordstrom Inc. and Zillow Inc. JPMorgan acquired the assets of Washington Mutual after the government seized the mortgage lender in 2008.