A partnership between Nitze-Stagen & Co. Inc. and Daniels Real Estate has obtained a $435 million refinancing loan for Starbucks Center, a 2.1 million-square-foot mixed-use property in Seattle that houses Starbucks’ world headquarters. Deutsche Bank provided the financing in a deal arranged by Newmark.
The refinancing will retire a prior $425 million CMBS note issued by the same bank in 2020, according to Yardi Research Data. That loan was due to mature in 2029.
Currently, there are a total of 14,000 properties encumbered by loans that will mature soon or by the end of 2027, according to the latest Yardi Matrix office report. These notes make up 33 percent of all office debt in the country, which amounts to $290 billion.
A historic building in Seattle
Originally completed in 1912 as an industrial property, the building was redeveloped for a mix of uses in 1992. It currently comprises nearly 1.5 million square feet of office space, alongside 600,000 square feet of space for retail, warehousing, light-manufacturing and distribution functions. Starbucks Center is the oldest and largest building in existence to achieve a LEED Gold certification.
Starbucks moved at the property in 1993. The company has recently signed a 20-year lease extension, securing its headquarters through 2038. Over the last three decades, the 10-story Starbucks Center has undergone more than sixty expansions and renovations, in which the tenant has invested over $300 million of its own capital.
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Located at 2401 S. Utah Ave. in Seattle’s SoDo district, Starbucks Center is just off Washington State Route 99. Major thoroughfares in the area include interstates 5 and 90. Downtown Seattle is within 3 miles north. The office building is also near the T-Mobile Park and Lumen Field stadiums.
Newmark Co-Presidents of Global Debt Structured Finance Jonathan Firestone and Jordan Roeschlaub, alongside Vice Chairman Blake Thompson and Co-Head of U.S. Capital Markets Kevin Shannon, arranged the financing.
Office vacancy on the rise in Seattle
June saw the vacancy rate in Seattle rise to 26.7 percent, reflecting a 340-basis-point increase over the year, the Yardi Matrix report also shows. Meanwhile, the national rate stood at 19.4 percent, virtually unchanged from the previous month.
The metro’s office listing rates clocked in at an average of $35.63 per square foot. The amount was down 2.8 percent year-over-year, yet remained higher than the national $32.87 per square foot.