The University of Washington announced today that it has successfully negotiated the purchase of the Safeco property in the University District. This landmark transaction promises to expand academic space on the campus as administrative units are targeted for relocation to the Safeco building. The purchase will also enable the University to consolidate in the University District programs and operations that are scattered in leased space throughout the city, bringing these activities in much closer proximity to the University.
“This is an amazing opportunity for the University, one that will have beneficial impacts on our programs and people for generations to come,” said UW President Mark A. Emmert. “With this purchase, the University has expanded its office capacity in close proximity to the Seattle campus, opening up many opportunities to benefit both our core academic programs on the campus proper, as well as the many support services spread throughout the city. It’s an opportunity that comes along once, and I’m delighted we were able to acquire this property.”
The deal includes the prominent Safeco Tower plus three adjacent low-rise buildings totaling 510,546 square feet, two parking garages with 727 stalls, a residential building with 29 units, and two surface parking lots. Safeco announced earlier this year that it was selling its University District headquarters and consolidating much of its operations in downtown Seattle. About 700 Safeco employees will remain in the district in leased space at Roosevelt Commons.
Once Safeco put the property on the market, the University’s Board of Regents authorized Emmert and two Regents, Board Chair Sally Jewell and Fred Kiga, chair of the Finance, Audit and Facilities Committee, to negotiate the purchase on behalf of the board and consult with the board in executive session. Under the state’s Open Public Meetings Act, real estate negotiations may be conducted confidentially to maximize the negotiating power of the state agency and produce the best deal possible.
The University will purchase the property for $130 million, financed by debt the University will issue. Closing is expected within 30 days. Safeco will lease back the property through December 2007, when it will move downtown.
The University currently leases 1.2 million square feet of space throughout the city. Purchase of the Safeco Tower will direct resources currently being spent on rent to help finance the debt. Over time, as the cost of rent increases, moving units into an office building it owns will result in considerable cost savings to the University. The buildings will also allow campus space, currently used for administrative offices, especially sites on the west campus, to be made available for teaching and research purposes.
Safeco’s decision to sell created an opportunity for the University to acquire space in the University District at a cost significantly lower than new construction on or near campus. “From a financial perspective, this transaction makes great sense,” said Emmert, “allowing us to reduce the cost of leasing offices while gaining new space at a fraction of replacement costs.”
With more University employees working in the heart of the U-District, local businesses will likely see an increase in drop-in customers, helping support on-going efforts to revitalize the area.
“Safeco has been an exceptional corporate citizen over the years,” said Emmert, “and has contributed in many ways to the well-being of the University District and in supporting programs at the University. Their presence here will be missed. The University recognizes its responsibility as an institutional neighbor to residents and businesses in the district as well, and we intend to inhabit these properties with the same sense of responsibility and stewardship we feel towards the campus proper.”
For more information, contact: Jeanette Henderson, UW director of real estate, 206-616-3414; Theresa Doherty, UW assistant vice president for regional affairs, 206-221-2603; and Norm Arkans, executive director of media relations and communications, 206-543-2560.