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Residential RE: Is Business Really Booming?

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There’s been much news lately that residential construction is roaring back!  But is there too much going on too quickly—and will all these projects really materialize?  And what is this telling us about the condominium market?  Here are some of the latest projects in the pipeline:

311 Cedar St:  The former Musician’s Building is now gone, with work underway on The Alto, a 17-story, 184-unit high-rise with 2,700 sq ft of retail space.  The project is scheduled for completion in early 2012.

504 Terry Ave & 1106 East Jefferson St:  The once-proposed Harbor Vista project from now-bankrupt Mastro Properties just got a new owner– an LLC out of San Francisco.  Rumors are that the property will be developed into a residential/retail complex.

888 Western Ave:  Goodman Real Estate’s original plans for an office building have changed to a 16-story residential building with 208 units with 9,907 sq ft of retail, plus 8,300 sq ft of recreation/public plaza space. 

1430 Second Ave (Second & Pike):   Urban Visions’ hotel and condominium plan have changed to a 440 foot, 35-story LEED-certified building of 290 apartments and 14,850 sq ft of retail and restaurant space, which includes a “Sky Bar” and restaurant overlooking Pike Place Market.  

1623 Bellevue Ave:  Proposed is a six-story building with 23 residential units and 1,000 sq ft of retail. 

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2116 Fourth Ave – located next to the Cinerama, the proposed tower will have 357 units, 2,700 sq ft of ground-level retail. 

2625 Third Ave – The current site of the American Lung Association is slated to make way for a 19-story building with 204 units above 4,000 sq ft of retail space.

Second and Bell  – Bell 206, a 122-unit apartment complex,  is expected to break ground in January.

Eighth and Seneca  –  A recent financial deal has been reached to hang onto this site, where a twin tower project containing 280 units is in development.

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Market Street and 14th Ave (Ballard):  Replacing Sunset Bowl will be Avalon Ballard, a 271-unit apartment complex. Construction scheduled to begin in Summer 2011.

Market Street Landing (15th Ave NW and NW Market, Ballard):  Equity Residential, an S&P 500 company specializing in apartments, condominiums and corporate housing, purchased the 1.4 acre site in October 2010. 

5711 24th Ave NW, Ballard:  Replacing the old Ballard Library will be Ballard West.  Currently scheduled to start construction in the summer, it’s planned to have 107 apartments, three live-work units and 6,500 sq ft of retail.

200 – 106th Ave NE (Bellevue):  Soma Towers is a proposed two-tower project —  Tower One at 23 stories high with 142 units, and Tower Two at 17 stories high with 124 units.   

With few construction events over the past several years, current vacancies are lower and rents are higher, making residential construction promising again.  Recently reported was Dupre + Scott Apartment Advisors’ latest forecast that 2,500 units will open in the tri-county area in 2011, with an additional 14,600 units possibly opening between 2012 and 2015. This concurs with opinions recently reported from Apartment Insights.  They predict a tight market from mid-2011 into 2012, bringing on significant rent increases.  

However, just because start or completion dates are announced doesn’t mean they’ll actually happen.  One of the items on our residential list first hit the presses in 2007. After inactivity since 2008, another project is now up and running, but still needs to apply for building permits.  We listed a property which sources tell us is a go, but is currently stalled and looking shaky for a start anytime soon.

The glitch?  Money.  Lending institutions now require a project’s net operating income to be profitable based on current, not projected, rents.  Plus, developers have to put up more of their own money.  Before the recession, developers only needed to contribute 15 percent equity.  Debt coverage ratios (net operating income divided by debt services) of 1.25 or better are now required. This pushes equity contributions to rates between 25 to 35, even up to 40 percent.  A number of developers now need to seek equity partners – if they can find them.  Equity partners were recession victims, too.

The Outlook for Condominium Development?

With current debt coverage ratios applying here as well, there’s nothing in the pipeline regarding new construction.  But as apartment development explodes, we predict that if the condo market picks up as well, they’ll look at apartment buildings to fill demand.  We’ve seen this pattern in the Seattle housing market before.  Both Belltown Court and The Klee Lofts started out as apartment complexes.  And, as condo demand increases, former condo projects which converted to apartments over the past couple of years may return to being condos again.  We think one of the first to turn back may be Bellevue’s The Bravern, which announced that intent when they converted both towers from condos into apartments in 2010. Equinox and Rollin Street Flats were once condominiums, too. 

However, the recession has made for reluctant homebuyers. What will the potential glut of rentals really do for the conversion market this time around?  Will more potential buyers simply remain permanent renters?  We think it’ll depend on what a buyer wants in the long run.  Predictions are that a renter’s market won’t resurface until well after 2015, and maybe beyond if the conversion market takes off.  In the meantime, rents should continue to rise and keep pace with the same costs it would take to own a home.  

All indicators seem to point to the real estate market heating up again. With record-low home prices, plus interest rates the lowest they’ve been in 60 years, buying a home is not only more affordable but is also an investment that could pay off big over time.  You don’t get that option with a rental.  There is a lot to think about but if you’d like to discuss your options further, just contact us at our Stroupe Group link.

Olive 8’s New Listing Agent? Realogics Sotheby’s!

olive 8 seattleRealogics Sotheby’s International Realty is ending 2010 on a very high note, and it could result in an amazing buy for you in 2011.

An exclusive listing agreement was signed last week with developer RC Hedreen Company to sell all of Olive 8‘s remaining inventory, now starting from the 27th floor and up.  Olive 8 is a 39-story, 229 unit mixed-use condominium and hotel ( Hyatt at Olive 8 ) high-rise located at 8th Avenue and Olive Way in downtown Seattle.

In order to maintain 50% project sales as required by Fannie Mae lending guidelines, 32 units at Olive 8 were recently sold at auction to replace mostly investor presales that were unable to close in today’s credit environment. The auction helped establish a base for current market values, enabling RC Hedreen to restructure its construction debt with US Bank, providing a long term runway to sell into an improving marketplace.

“We’ve eliminated many of the pressures that we faced, so it’s now time to realign values for today’s market,” said Dick Hedreen, RC Hedreen’s chairman. “2011 represents a new beginning for Olive 8 and Realogics Sotheby’s International Realty is uniquely positioned to lead us through a successful sellout.”

Dean Jones, Principal of Realogics Sotheby’s International Realty, added that there is a finite supply of new construction condominiums in downtown Seattle. No new developments have broken ground since the credit crunch in 2007 and since that time, several condo projects reverted to apartments and sold to REIT’s, reducing inventory.

According to Jones, fewer than 450 new condominiums remaining unsold in the city center and most pundits agree it could be many years before any new condominiums are developed. RC Hedreen and Realogics Sotheby’s are researching home values by retaining appraisers and meeting with real estate brokers and potential homebuyers to reassess the marketplace. Olive 8 is expected to be reintroduced to the public in 2011 with new lower pricing.

rsz_1olive-8-condo_logo for text“I’m confident that our business philosophy will make perfect sense to those homebuyers that have been waiting on the sidelines for an opportunity,” says Hedreen. “And considering that our available inventory now starts on the 27th floor, we saved the best for last.”

We are in the process of retooling our own websites for the new Olive 8 opportunities. If you would like to stay in touch on news or private tours when Olive 8’s new releases come on market, please contact us at this Stroupe Group link.   

Seattle Makes Top 10 List for Business

December 22, 2010 by  
Filed under Featured, Finance, National

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MarketWatch, part of The Wall Street Journal Digital Network, released its annual rankings of the best cities in the U.S. for business this week. Out of 102 major metro areas covered, guess which city climbed from No. 31 in 2009 to No. 10 in 2010? 

MarketWatch uses a variety of measures to break down data into two categories: “Company Score,” the concentration of businesses within a metro area, and “Economic Score,” which takes into account unemployment, job growth, population growth, personal income and local gross domestic product.  More metric categories were used in this year’s rankings, in part to better reflect tourism business and the economic impact of military bases.

Based on these calculations, Seattle’s No. 10 ranking had a total score of 932, with a Company Score of 501 and an Economic Score of 431. Ranked No. 1 is Washington, D.C., then Omaha; Boston; Des Moines, Iowa; Minneapolis; Denver; Richmond, Va.; New York City and Harrisburg, Pa.  Other West Coast city rankings include San Francisco at 33, Portland at 52 and Los Angeles at 61.  At the No. 102 position?  Fresno.

What made the difference this year? Employment. Whereas Seattle’s sad showing in 2009 was due to poor statistics in job creation, its jobless rate dropped by a third of a percentage point to 8.7 percent in September 2010. MarketWatch also notes that Seattle did well in jobless comparisons between 2006 and 2010, and in keeping the percentages down over that period.  It also hits the upper ranks in creating jobs relative to its population.

However, MarketWatch noted that Seattle is lacking in the number of major private companies. No businesses from Forbes Private Companies’ list reside in Seattle, and we are the largest U.S. city without one.  But while the Seattle area may be amiss in that sector, it is home to a diverse selection of large S&P corporations such as amazon.com, Boeing, Costco, Microsoft, Nordstrom and Starbucks.  Plum Creek, the largest publicly-held timber REIT in the country, is based in Seattle. And last week, The Fred Hutchinson Cancer Research Center announced its purchase of the 1100 Eastlake building, expanding its South Lake Union footprint to 15.2 acres. 

Add a Pacific Rim gateway, the natural beauty of the Puget Sound area, plus a diverse culture, and we’re confident that Seattle will continue to remain high in “Best” rankings for years to come.

(Photo by Marmaduke Percy, Wikimedia Commons)

Pike Place Market – Where to Find Everything

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If you and your guests are thinking of visiting Pike Place Market over the holiday season, you may be in for a few surprises when visiting your favorite spots.  Well into Phase 2 of its $68.6 million, four-year renovation project, a number of businesses are now undergoing relocation and in a few cases, closure within the Market.  This part of the renovation will run into the spring of 2011.

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However, construction is now in “slowdown” mode for the rest of the year. Business is currently brisk, with the vendors in full holiday mode.  Shopping is always a fun and festive event at Pike Place Market, and their website now has a link where you can get the latest news about your favorite shops and restaurants.  Click on this construction summary site for more details.  You can also sign up for an online feed to keep you abreast of the latest Market news.

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For example, five portable containers fitted with power, ramps, and water supply will be in operation in front of the Market and in place until springtime.  Choice Produce and El Mercado Latino are currently located in these containers, with Quality Produce to follow. Quality Cheese and Pike Place Market Creamery will also share a container.

Public Restrooms received a makeover too.  Rebuilding the designated women’s room in the First and Pine building is nearing completion, and a new unisex restroom on the First Avenue floor of the Corner Market should now be open.  New restroom transformation of the Rummage Hall has also been completed. You can find the Rummage Hall’s inside location at the rear of the Soames Dunn building for the winter, and its Western Avenue location will remain open until springtime.

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The focus of the renovation work is to upgrade the Market’s core infrastructure.  This includes all mechanical, electrical and plumbing (MEP) systems, installing a four-pipe system serving each of its eight buildings, and implementing new main switch gear.  Leading the renovations is Turner Construction, which is also in charge of  all seismic work, adding three new elevators serving all Market floors, and upgrading the Market’s exterior skin to now withstand salt air and UV rays. 

The Pike Place Market Preservation & Development Authority (PDA) is working with all affected tenants on everything from packing up to temporary relocation, as well as arrangements to keep business activity going in each venue.  PDA is determined to keep the Market fully operational to vendors, residents and tourists during renovation. 

The Market will be closed on Christmas and New Years Day.  And, when construction gets back into full swing on January 3rd, a number of businesses will be affected. Keep tabs on construction with the construction summary link above, and you can also check out the entire website at  http://www.pikeplacemarket.org/

Open House: Sunday, December 5, 2010

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Open 1-4 pm

Concord – 2929 1st Avenue, Unit 600

$675,000

Mls: 133731

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Situated on the NW corner of the Concord, this unit boasts exceptional unobstructed views of Olympic Sculpture Park, Elliott Bay, Olympic Mountains and Alki point. This bright unit features maple cabinets, slab granite counters, stainless steel appliances, gas cooking, new hardwoods and A/C.  The Concord features concierge service, fitness center, spa, terraces and a business suite.  All of this, in the heart of Belltown!

Hosted by James Stroupe– (206) 910-5000, james@stroupe.com 

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Mass Transit Made Simple

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We recently reported on parking updates, and now we’ll look at mass transit. Most of us have experienced a late or no-show bus, some even deciding that $20 of parking is worth 40 minutes of wasted time.  However, new technology could now change your mind.  AND, if mass transit access is a factor in your real estate purchase, we’ve come across a link for that as well.  Click on the titles below for these websites:

ONE BUS AWAYis an online bus tracking system, using data feed supplied by transponders of its various transit companies.  There’s even an “Explore” tool which allows you to search for restaurants, businesses, parks and other amenities “One Bus Away”!   

Get real-time arrival information, on the stop of your choice, for the following transit companies:

  • Metro Transit
  • Washington State Ferries
  • King County Marine Division (Water Taxi)
  • Sound Transit
  • Community Transit
  • Pierce Transit

 And, you’re able to access this in a number of ways:

  • Web Interface
  • Touch-Tone Phone
  • SMS Text

Plus, there are native OneBusAway client setups for:

  • iPhone
  • Android
  • Windows Phone 7

Finally, OneBusAway is a local business!  It was developed at the University of Washington by grad students Brian Ferris and Kari Watkins, with additional funding by Nokia Research and the National Science Foundation. It’s an open-source system and the group is working towards offering the service to other cities nationwide.  OneBusAway was also a 2010 winner at the Washington Technology Industry Association’s Industry Achievement Awards.  

RIDER ALERT – Sign up for your bus route and Metro’s “rider alert” tool delivers text or e-mail alerts about your bus in case of construction, special event re-routing, or snow emergencies.  It’ll also zap you an email with schedule changes and holiday information.  

METRO APP CENTER –  There are a number of apps and mobile tools which developers have built using Metro Transit data, and they’re free for you to download at this site, including OneBusAway.

REAL ESTATE — For those who want to buy in an area with mass transit options, there’s a local link in the Metro App Center for estately.com.   Click on Options. The right hand column has a “choose” link under Mass Transit where you can type in a Metro route number, and properties either along or close to that bus line appear.  You can check out neighborhood walkability scores and yes, parking too. Run in conjunction with NWMLS, it provides a lot of information and can be confusing to wander through.  Just contact us at this Stroupe Group link and we’ll help you find what you’re looking for, in fewer steps.

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There’s still some glitches with OneBusAway and Rider Alert, most recently when buses changed to snow routes during the recent Thanksgiving week storms. In 2011, these should run smoother when Metro buses are equipped with GPS systems.  Technology comes at a price, though– fare increases for most passenger groups go up in January.  However, mass transit is easiest on the environment, your wallet and your driving sanity.  For most of us, mass transit is the only way to fly.

For One-of-a-Kind Giving: Try an Artwalk!

Among Seattle’s great neighborhoods are a dozen monthly Artwalks, and they’re ready for holiday shoppers!  All types of media are featured, but most Artwalks also have music, food and special events, too. Artwalk hours are from 6-9 pm unless otherwise noted. Below is a timeline of what’s happening when during December, as well as when Artwalks are held year-round. Click on the neighborhood name for their weblink.

December 1st (first Wednesdays)

WallingfordOne of the largest of the neighborhood art walks, most located right on 45th St N.

 

December 2nd (first Thursdays)

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Pioneer SquareThis venue is so big, it’s best to check their website where you can choose what kind of art you’re searching for.

ChinatownThis month, they also have Shop-o-Rama events on Saturdays from December 4-18.

 

December 3rd (first Fridays)

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Fremont – You don’t need a First Friday to party at Fremont, but this month also hosts the Annual Lenin Lighting!  Join the fun at 5 pm and stay for shopping at many venues.

 

December 9th (second Thursdays)

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Capitol Hill –Hours for the Blitz Capitol Hill Arts Walk runs from 5-8 pm.  Wander around more than 50 venues, with activities varying every month.

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West Seattle – Over 60 merchants covering West Seattle Junction, Alki Beach, Admiral District, Morgan Junction, Fauntleroy District and Delridge.  This month’s hours are extended for late night shopping.

 

December 10th (second Fridays)

Greenwood/Phinney –Located along Phinney Ave N and Greenwood Ave N.

 

December 11th (second Saturdays)

Ballard — Start at the south end of Ballard Ave, work your way up the street to Market and beyond!

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Central District   — Held at 23rd Ave and E Cherry St from 1-5 pm.

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Georgetown – Art Attack at over 30 venues, covering the neighborhood, the Horton Building, south of Corson and North Airport Way.

 

December 16th (third Thursdays)

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Belltown – Art, food and music all around Belltown.

Upper Queen Anne – No active website available.  Look for the balloons in front of participating venues along Queen Anne Ave N.

 

If you’d like to see all the Artwalk information at a glance, Seattle Councilman Nick Licata has a great arts link.  Check it out for all kinds of Seattle culture information. And happy shopping!

Getting Around Downtown – by Car

November 23, 2010 by  
Filed under Featured, Land Use, Lifestyle, MISC

Ready or not, it’s Holiday Time!  Downtown Seattle’s holidays link is loaded with information about entertainment and arts events, shopping, dining and fun in general. But where, oh where, can you park?

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GARAGES:  TRY e-PARK!

The City of Seattle recently introduced e-Park, a guidance system providing short-term (approx 2-4 hours) parking information in real time. At a glance, e-Park signs can guide you to available parking spaces throughout the Downtown Retail Core and Pike Place Market, a combined total of over 4,500 parking spaces. Here are the e-Park locations:

Republic Parking at Third and Stewart Street Garage

Washington State Convention and Trade Center

Pike Place Market

Unico Properties at the Puget Sound Plaza/Cobb Building garage

Pine Street Group and Ampco Parking at the Pacific Place Garage

Washington Athletic Club

Second Avenue, near the southwest corner of Second and Virginia

Fifth Avenue, near the northwest corner of Fifth and Lenora

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The system is pretty simple. At key entrance points to downtown, signs guide drivers towards participating garages with available short-term spaces. The sign above will tell you, in real time, how many spaces are available in each garage.

You can also plot your parking strategy ahead of time by visiting www.seattle.gov/parkingmap. This is an interactive citywide parking map, displaying e-Park and on-street parking information, garage and lot locations, rates, and hours of operation.

The e-Park system is not a new one.  Guidance system technology is commonly used throughout Europe and in our country, has caught on in Portland, San Francisco and San Jose.  Seattle’s program is unique because in addition to city garages, we also partner with those that are privately owned. Watch for the program to expand into Pioneer Square and the Central Waterfront within the next two years.

 

METERED PARKING: LATEST NEWS

In recent days, the Seattle City Council made compromises with Mayor Mike McGinn on this hot-button issue. Meter rates will increase up to $4 an hour, BUT not in all neighborhoods. 

Two parking studies will be done prior to any changes. The first one will take a look at current space usage. The second will assess whether to tailor parking rates to specific neighborhoods, and adjust those rates depending on the time of day. The goal is to have 85 percent of the street spaces filled.

The council agreed to extend parking-meter hours from the current 6 p.m., until 8 p.m. instead.  However, they rejected McGinn’s plans to charge for Sunday parking, bringing sighs of relief to a number of business owners relying on free parking for weekend customers.  At this time, it looks as if no changes will take place until at least 2012.

 

PARKING METERS & PAY STATIONS:  HELP INFO

Questions about a credit card transaction? Call 206.684.PARK

Problems with a parking meter or pay station? Please call 206.684.5260. Best to report this, because it’s illegal to park at a nonworking meter.  

Want to pay or contest a parking citation? Call 206.684.5600

General questions about pay stations? Email paystations@seattle.gov or call 206.684.ROAD

And remember… your parking stub is good for anywhere in the City. Say you pay for time downtown, then need to run to Capitol Hill. Keep it on your window, for when you park the second time, whatever minutes are left on your stub still apply.

We haven’t forgotten those who Go Green… there’s some great mass transit links online that you may not be aware of, and we’ll spotlight them in a separate article. Watch for it!

Open House – Sunday, November 21

November 18, 2010 by  
Filed under MISC, Watermark

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Watermark Tower – 1107 1st Avenue, Unit #1702 – Open 2 – 4 p.m.

$485,000 – NWMLS #: 028680

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This lovely 2 bedroom, 2 bathroom home is warm and inviting!  Located on the 17th floor with southeastern exposure and spectacular citywide views. Only minutes away from Seattle Art Museum, Benaroya Hall and Pike Place Market.  This in-city oasis also provides spacious living with open floorplans, plenty of windows, and air conditioning.

Hosted by James Stroupe,  James@Stroupe.com , 206-910-5000

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Grandview – 2201 3rd Avenue, Unit #2104 – Open 1 – 4 p.m.

$650,000 – NWMLS #: 107494

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Truly amazing!  This unit boasts 180-degree views from every room PLUS its three private decks! Lake Union, Space Needle, Puget Sound– extraordinary at this price! 2 bedrooms plus a custom-built office and 2 bathrooms.  Hardwood floors and custom tile flooring complete this graceful home.  Secured parking and entrance.  All this and more at the Grandview!

Hosted by Julie Roh,  Julie@Stroupe.com , 206-354-1030

Harvest Time in Seattle: Commercial Real Estate

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We are currently experiencing a bumper crop of new and existing property changes in Seattle, and receiving national notice as well.  Let’s go through the latest on the commercial side:

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7th & Madison:  Nine stories, 204,000 square feet, zero tenants! But that may be changing. Rumors are that HAL Real Estate and Urban Renaissance Group have purchased the property and The Polyclinic may become the primary tenant.  

818 Stewart St:  DCI Engineers took advantage of their expiring lease in Bellevue’s Skyline Tower to move, occupying 16,000 square feet on 818 Stewarts’s tenth floor by the end of November.  A caveat is that DCI was the structural engineer of this building and will now be able to show their work, onsite, to potential clients.  Although 55 employees will be relocating to work in Seattle, DCI will still maintain a presence in Bellevue and is looking for other space.  818 Stewart has 14 stories, 238,000 square feet, and is 86 percent leased.

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1301 Second Ave: Tacoma’s largest private employer, Russell Investments, bought the former 42-story WaMu Center on Second Avenue in 2009 and moved in 900 employees this fall.  What’s next for the company?  An outdoor sign!  In the works is an amendment to the City’s Land Use Code (Title 23) “to allow placement of wall identification signs in certain downtown zones on buildings at heights above sixty-five feet when tenants have a lease in effect for a minimum of 200,000 square feet of floor area in a single building.”  The City would still retain sign design approval.

1321 Seneca St:  Owned at the time by the now-defunct Barclays North of Lake Stevens, plans had been to turn this quarter-block of property into a 24-story tower.  Now a parking lot, its bank group recently put it up for sale.  Happily, representatives are now fielding queries from interested buyers at better than anticipated prices.  A sale is expected by year-end or by early 2011.

1501 E Madison St:  The former home of CC Attle’s bar is undergoing a bit of transformation. The Bullitt Foundation is going to turn the space into a six-floor, 52,000 square foot building called the Cascadia Center for Sustainable Design and Construction. Its goal is to be a “living building”, designed to satisfy all its energy, waste and water needs onsite.  It will headquarter Bullitt, plus provide office and commercial space for companies involved in the green building industry.  It also plans to position itself as a focal point for education and sustainable development awareness. Construction begins this winter, scheduled to be completed in early 2012.

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224 Westlake Ave N:  The former Athletic Supply building was recently sold to Northwest Retail Partners.  Built in 1926, plans are underway to remodel the entire 32,000 square foot building, plus add a fifth floor penthouse. The penthouse will house Northwest Retail’s offices, and NRP plans to lease out the rest of the building.  

On the national front, the Urban Land Institute, in conjunction with PricewaterhouseCoopers, performs surveys and interviews with over 875 real estate investors on the country’s top 50 markets, then releases annual rankings and forecasts. For 2011, they ranked the Seattle Metropolitan area at No. 6 for commercial and multifamily investments.  When you take into context that Seattle was ranked No. 1 in 2009 and dropped to No. 8 in 2010, the climb back up is great news!  There’s more to come, and we’ll keep in touch.

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