Amazon.com completed the acquisition of their corporate campus yesterday. The $1.154 billion transaction between Paul Allen?s Vulcan Real Estate is composed of 11 buildings with over 1.8 million square feet of space. The price equates to $644 per square foot.
An overlooked component of this deal is roughly 100,000 square feet of retail space in the mixed-use buildings. The retail space is currently 75% leased and Amazon will most likely turn over the leasing and management of the portfolio to a major commercial brokerage firm. Nonetheless, it is interesting to see a company who has long been the counter to brick and mortar retail, now becoming a landlord of brick and mortar retail businesses.
Earlier this year?Good E-Reader reported that Amazon was preparing to open a retail store in Seattle. The store would focus on selling Amazon branded products including the Kindle. This rumor didn?t pan out as reported. Now that Amazon owns over 25,000 square feet of vacant retail space, will they be tempted to test this concept?
The transaction was the largest office deal in the United States this year.?Vulcan Real Estate?s Ada Healey said the sale was partially driven by the looming changes to capital gains tax rates. Capital gains are currently at an all time low of 15% and are expected to increase next year. Amazon was also motivated to close the deal by the end of the year. In a filing with the Securities and Exchange Commission, Amazon stated they made a $51 million non-refundable deposit that would be forfeited if the transaction did not close this year.
Source: http://www.soundcre.com/2012/12/22/amazon-entered-brick-mortar-retail-business-seattle/
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