Record price of $575/square foot paid for Bellevue towers

Less than two years after paying a record amount for a downtown Bellevue office complex, New York-based Investcorp International has turned around and sold it — this time, for yet another record amount, Seattle-area brokers said Tuesday.

Investcorp sold Civica Office Commons for $175.7 million, or $575 a square foot, in a deal finalized last week, beating the $462 a square foot it paid in March 2005, brokers said.

The new owner: New York-based real-estate-investment company Brickman Associates.

"It's mind-boggling," said John Miller, senior managing director for Cushman & Wakefield's Northwest region. "They must anticipate that rents are going to skyrocket over the next few years."

In downtown Bellevue, only 5.4 percent of office space is vacant, down from 29 percent in 2003. And the average annual asking rent is up to $28.11 a square foot from $24.16 a year ago, according to brokerage Cushman & Wakefield.

Brokers said the Civica deal offers more proof that the Seattle area is capturing the attention of large, national real-estate-investment companies, primarily because of its strong job growth.

Investcorp's deal for Civica 18 months ago, with Bellevue-based Schnitzer Northwest as the seller, marked the most ever paid per square foot of office space in the Seattle area.

Now, Brickman has set a new record, surprising even those in the brokerage community who've been talking about a trend toward bigger and bigger deals.

Officials with Investcorp International and Brickman Associates could not be reached for comment.

Miller said he's bullish on the Bellevue market but noted about 2.6 million square feet of office space is being built or planned in the city, signaling more competition for properties such as Civica.

"You wonder how stable the asset is," Miller said.

Civica, at 108th Avenue Northeast and Northeast Second Street, has two midrise office towers joined by a glass atrium featuring a granite fireplace, library and fountain. At 305,835 square feet, it's fully occupied, with tenants paying on average about $31 a square foot, brokers said.

Built in 2001, Civica boasts on its Web site that it redefines the phrase "smart use of space" with a design aimed at helping businesses enhance employee retention and productivity. Amenities include a concierge service, valet parking, an exercise room and dry-cleaning pickup.

"This is the kind of building where people sit and say, 'This feels right,' " said Don Fosseen, a broker at CB Richard Ellis in Seattle. "It's well-designed."

Tenants include such big names as Microsoft, Morgan Stanley and Anheuser-Busch.

Fosseen said the record price makes sense, given other recent deals in the Seattle area.

In June, New York-based Tishman Speyer paid $560 a square foot for Market Place I and II in downtown Seattle; in April, Metropolitan Park North, near downtown Seattle, went for $475 a square foot, Fosseen said.

Brickman's Web site says it has invested more than $1.75 billion in real estate throughout the United States since its founding in 1992.

Its recent purchases include an office and retail building near Boston's Financial District and the St. Regis Hotel in Washington, D.C.

Brickman also owns buildings in Los Angeles, New York and Detroit and Durham, N.C.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com