Seattle Real Estate News of the Day

Thursday, April 21, 2011

Seattle Times Daily Journal of Commerce Headline
Leading indicators point to strengthening economy Real Estate Buzz: Smith getting ready for ‘the next Google’
Chase to open 12 new bank branches in state A meeting last week at City Hall felt more like one Seattle developer’s strategy session on how to build a big new campus for what a city staffer called “the next Google.”

City Council members are involved because they’re eager to bring jobs into the city, especially Urban Visions’ Stadium East property. Urban Visions CEO Greg Smith says it’s about jobs and smart land-use planning.

Stadium East is now a collection of warehouses near the intersection of interstates 5 and 90, and it’s just a few blocks from the region’s new multi-billion-dollar transit system.

“We should try to put as many people [there] as we can,” Smith said.

Smith doesn’t have a tenant, but City Councilmember Sally Bagshaw wonders what would happen if he suddenly got one. Could the city act quickly enough to give Smith the zoning he needs to land a big user?

“I am very interested in making sure this land is available for the kind of job creation we’re talking about,” she said.

Seattle developer Greg Smith envisions a campus like’s for his Stadium East property. Proposed zoning would allow 16-story towers on the site.

It has taken more than five years to get to this point, with the full council poised to the OK the south downtown rezone on Monday. In addition to allowing taller buildings in parts of Pioneer Square and the Chinatown/International District, the legislation would allow Smith to develop up to 1.2 million-square-feet of commercial space on the 7-acre Stadium East site.

Smith wants the council to allow a more dense campus with the large floor plates today’s office users desire. What would that look like? Imagine the campuses of the Gates foundation and “That’s what we want to create,” he said.

While there’s no tenant, there is a plan, said Smith, who has built Urban Visions around a commitment to sustainable development. He recently opened Stadium Nissan at Sixth South and Royal Brougham Way, and envisions the area becoming Seattle’s new auto row, with office space above the dealerships.

Cars and green buildings may seem incongruous to some, but not Smith.

“I love the idea of creating a green auto row,” he said, adding several car companies asked about leasing space from him. He chose Nissan because it manufactures the all-electric Leaf.

He said he wants to create an “energy independent campus” that would be greenest in the region.

Boosting Stadium East’s density would mean increasing the floor-area ratio. Under the proposal headed to the full council, the maximum allowable FAR in the Stadium East area is 3.5. Smith asked the council’s Committee on the Built Environment to increase it to 5, and said ultimately he’d like to see it at 7, the same FAR as Amazon’s campus.

Buildings at Stadium East could be up to 16 stories tall. Boosting the FAR increases the chance of getting tall and slender buildings with more open space, which is what Smith wants, according to his attorney, Jack McCullough, who lobbied the Committee on the Built Environment on the FAR issue.

Smith didn’t get his wish, though committee chair Sally Clark says once the South Downtown rezone is approved, she’ll look at rezoning Stadium East.

Smith has been pushing for higher density in south downtown for eight years. “I think finally we are there,” he said. The 3.5 FAR is a step in the right direction.

Smith will start by expanding Stadium Nissan, and then move on soon to “creating the bigger picture.” He is working with Mithun on preliminary plans.

Tracking AT&T’s office plans

You’d think AT&T’s $39 billion acquisition of Bellevue-based T-Mobile USA would mean AT&T needs less office space here, but that’s not the case, at least in the short term.

Dallas-based AT&T leased 44,000 square feet in Bothell at Canyon Park Commons, according to Colliers International’s latest quarterly report. Now sources say the telecom giant is on the hunt for several hundred thousand square feet. We hear this is not related to the proposed AT&T/T-Mobile deal, which is awaiting regulators’ approval.

Tim O’Keefe of CB Richard Ellis’s Seattle office is AT&T’s broker, but he declined to comment.

Long-term, the merger can’t be good news for the Seattle market, despite AT&T’s stated intention of maintaining T-Mobile staff and a large concentration of AT&T employees. Together, the companies employ nearly 8,000 people on the Eastside. Any staff reductions would occur through natural attrition, an AT&T spokesperson told The Seattle Times when the acquisition was announced last month.

Need a spot near Boeing?

The 312,000-square-foot Intermec Technology headquarters in Everett next to Boeing’s plant at Paine Field is available for lease or sale. Pat McCabe and Hughes McLaughlin of Jones Lang LaSalle are representing both Intermec and the seller, ARKA Properties, on the assignment, which has a couple of interesting aspects.

McCabe said Intermec’s lease continues through December of 2014, but the company is interested in relocating earlier when a long-term replacement tenant or owner/user is found. The company vacated approximately 100,000 square feet, which has been available for sublease since the middle of 2010. Jones Lang LaSalle is also helping the company look for new space in the Seattle area.

Being next to Boeing isn’t critical for Intermec, said McCabe.

The 44-acre property has the potential for a larger campus because an adjacent 36 acres is available separately. The adjacent land has been approved for another 357,000 square feet of space.

No joke: Interbay site is for sale

The Port 106 property next to the Interbay Golf Center in Seattle is also on the market. Kauri Investments retained Tim Foster, Jason Rosauer and Dave Speers of Kidder Mathews to sell the 7.7-acre site, which has six buildings on nine parcels. Asking price: $17 million.

The site’s recent history is complex, with different city agencies having tried to acquire it. It’s been nothing but frustrating for Kent Angier, president and CEO of Kauri, which bought the site after plans were dropped for a monorail maintenance facility there.

Not 30 days after acquiring it, city officials called and said they wanted to buy the property for the Seattle Department of Transportation to dump spoils from ripped up streets. “I said we’re really not interested in selling it,” said Angier. The city threatened to force a sale.

Negotiations continued for about a year when a different city agency called about putting a new jail there, and that process dragged on for several years.

“It drove us nuts because we couldn’t do anything,” said Angier, who had no choice but to wait until last spring when — surprise — officials called back to say they didn’t need a new jail after all.

That was April of 2010. With the market at a standstill, Kauri was willing to sell to the city, so Angier circled back to SDOT and learned the agency was still interested and expected it could wrap up a deal by year’s end.

“Then in January or February, they said, ‘Well, we decided it doesn’t work for us,’” said Angier.

He called the whole convoluted process “a joke.” A better term comes to mind, but there’s no way we could get it by the editor.

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About CRE Northwest

Specialist in office & investment real estate in Seattle & the Eastside
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