KKR Gets Busy in Seattle Real Estate

KKR likes the long-term growth trends in Washington’s Puget Sound region, where it purchased two properties for more than $1.2 billion.

KKR & Co. has purchased two commercial properties in the Seattle region for more than $1.2 billion, saying it’s drawn to the metropolitan area in part for its highly educated workforce.

The firm bought a downtown office complex in Bellevue, Washington and a 43-story building in Seattle that is the headquarters of F5 Networks, according to a statement Monday. The F5 Tower is “architecturally significant to the Seattle skyline,” the alternative asset manager said.

The Puget Sound region, the coastal area of Washington, should see “attractive long-term growth” thanks to its highly educated population, lower cost of living than other top U.S. markets, and high quality of life, said Justin Pattner, KKR’s head of real estate equity in the Americas, in the statement. The firm is entering the Seattle property market with the two deals, which are being funded from its balance sheet and accounts co-advised by KKR.

“The region is the headquarters to several of the world’s largest companies, and has recently attracted others to build a significant presence” there, Pattner said. “We are looking forward to growing our own presence there with these transactions.”

KKR, the private equity firm co-founded by Henry Kravis, started its global real estate business in 2011. The team has more than 85 investment professionals working in equity and credit, and has invested or committed about $9 billion across more than 200 deals in the U.S., Europe, and Asia, according to the statement.

While KKR’s investment strategy has included real estate since 1981, the firm’s decision to create a dedicated business for the asset class came three decades later, its website shows. Pattner, based in San Francisco, joined KKR in 2011 to help form the real estate group.

Source: Institutional Investor

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