Harvest Time in Seattle: Commercial Real Estate

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:

7^th & 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.

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.

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.

Supply-and-Demand for Seattle Office Space Ranked Highest in the Country

The Marcus & Millichap 2008 National Office Property Index (NOPI) recently reported that Seattle has passed New York on a score that ranks 43 markets on forward-looking, supply-and-demand indicators. In an article by National Real Estate Investor, much of Seattle’s demand is attributed to an above-average job growth in the technology industry. Apparently developers are to deliver more space this year than the previous four combined.

New York falls to second place, but still tallies the lowest vacancy rate in the nation. Citywide vacancy is expected to creep up 30 basis points to 5.7% this year. Leasing volume was about 25% less in 2007 from 2006 and new construction activity will dip from 3.4 million sq. ft. in 2007 to around 3 million sq. ft. in 2008. The largest completion will be the Durst Organization’s 2.1 million sq. ft. Bank of America Tower at One Bryant Park.

Here is the index’s top 10:

1. Seattle
2. New York City
3. Boston
4. San Francisco
5. Los Angeles
6. Washington, D.C.
7. Oakland
8. Riverside-San Bernardino
9. Las Vegas
10. Orange County

We believe this to be a good reason to have faith that our market is going to do just fine although movement in the market hasn’t been as active as we would have hoped it to be during this time of year.

Fifth and Columbia Tower

It seems that there’s a new high-rise development in the news every other day. The latest is a new commercial high-rise which will be the city’s fifth tallest building located next to the Columbia Tower. Architects Zimmer Gunsul Frasca Partnership have designed a asymmetrical skyscraper next to the historic First United Methodist Church and developed by the same company who saved the church last year. The tower will stand 660′ with an emphasis on complimenting it’s neighboring structures by it’s transparent or reflective design (depending on the weather).

Building Features:

• Public courtyard between skyscraper and sanctuary.
• Sculpture and water feature within courtyard.
• “Living wall” on Columbia Street (living plants grown in facade).
• Solar-energy equipment on roof.
• System to capture rainwater for reuse.