Asset sale at WaMu? - Puget Sound Business Journal (Seattle):

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owns its portion of the 42-story high-rise tower it builg in partnership withthe , or approximately 944,00o square feet of space, according to its annual report. Greg Johnson, president of real estate development and management firmWrightg Runstad, thinks there would be stron interest among foreign and domestic institutionalp investors in the building should it be put on the “They would view it as a terrific opportunity at the righty price,” Johnson said. “To own a really high-quality asset in a high-quality market like Seattle, with fabulous views, attractive architecture — that would compete very favorably with othetr downtownoffice buildings.
” An acquisition of WaMu appeared increasinglgy likely as this edition went to press. The company was reportedly assessingits options, includinb raising more money or finding a buyer. Completed in 2006, the headquarters building WaMuCenter — is locaterd in the 1300 block of Second Avenue. Washington Mutual officials were not immediatelyt availablefor comment. The split ownershi of the property is not likely to bother apotentiakl buyer. Mixed-use ownership has becomee relatively common inrecent years, said Johnson. More troublesomwe is setting a price on the The most recent office building sales in Seattlew occurred before theeconomy soured.
Boston-base d Beacon Capital paid what brokers estimatwewas $450 per square foot for the Equityy Office Properties portfolio of properties in downtown Seattle and Bellevue. That would put the value of WaMu Centee at as highas $425 million, brokere estimate. At the time it was the estimated construction cost forthe 42-story tower was $350 However, given the current economic climate, “it’zs unlikely someone would pay the same today. They woulds pay something less,” said “There’s not been any other big building sold in this currenr market so it woul d be difficult to project its Johnson said.
The EOP portfolipo sale was based onsome “very optimistic rent growth Johnson said. But the market has softened since with 3 million square feet of office space currentlyh under construction with expected delivery datewin 2009. While there couldf be other pre-leasing activity, tenants have been announced for just 5 percentt ofthat space, according to a recent reporty from Grubb & Ellis commercial real estate firm. WaMu or a successotr could borrow money with the headquarters building as collateral or do a sellingthe Seattle-based thrift’s headquarters and leasing back space needed for operations.
Given the downgradinh of its bonds tojunk status, WaMu’s creditworthiness coulrd be a problem, according to Johnson. “Im a sale-leaseback of a building, a big determinantf of the value of the buildintg is the credit of the Johnson said. “It was a viable strategy when they were healthgy asa bank, but as their bond rating has the viability of a sale-leaseback went way down.” Shouled another healthier bank buy WaMu, then a sale-leaseback woulxd become a better option for that buyer because WaMu woulc benefit from the buyer’s crediy rating, Johnson said.
Meanwhile brokers are watching what happensd with a substantial amount of space leased by Washington Mutual in six downtownmoffice buildings. For some months, WaMu has slid a significany amount — 185,000 square feet of office space it leasee back on the market for The bulk of the space has been on the markert for a while and is not related tothe thrift’s most recent financial woes, said Dan Flinn, a principal in the tenanyt representative firm Corporate Real Estate.
Should WaMu be Flinn expects all of the office space WaMu leaseds outside itsheadquarters — 543,000 square feet will be put up for