Seattle Commercial Real Estate News of the Day

Wednesday, January 25, 2012

Find Space Now! Seattle Times Daily Journal of Commerce Headline
Our lease listings King County unemployment rate dropped in December

Teutsch gears up for 9th & Pine complex

Our sale listings Boeing 4Q profit up as plane deliveries take off Teutsch Partners will be ready to start constructing a seven-story apartment complex late this year at Ninth Avenue and Pine Street that will be different from other midrise buildings in the city.

More than 60 percent of the site — a parking lot — sits over the Metro Bus Tunnel, and the tunnel is just five to eight feet below the surface.

The developer and its designer, Runberg Architecture Group, are proposing to use five open web steel trusses from eight to 16 feet deep to span the tunnel and support the building. The trusses would span up to 84 feet in length.

The trusses would be similar to those used at the Olympic Sculpture Park, except only one will be visible in the Teutsch project, just inside the glass facade at the base of the building.

Brian Runberg, principal with the Seattle architecture firm, said the trusses are the most viable structural system to carry the building’s weight and not compromise the lid of the tunnel.

“This is not akin to midrise housing,” said Runberg. “The structural base is more similar to bridge construction. We’re creating a bridge to cover the tunnel.”

KPFF is the structural and civil engineer, and Karen Kiest Landscape Architects is also on the team.

The complex will have 70 to 80 apartments, 3,100 square feet of retail space, and parking for about 30 vehicles.

The developer wants to use a semi-automated stacking system in lieu of traditional parking in the building. Going below grade is not feasible because of the tunnel, and surface parking would reduce the building area given the small footprint of the site, Runberg said.

High-rise construction is allowed on the property. However, previous feasibility studies have shown it is economically challenging and carries more risk because of the large structural system that would be needed. “You can do it, but at the end of the day the price per square foot goes up exponentially the higher you go up,” said Runberg.

The project will at the northwest corner of Ninth and Pine. That’s adjacent to the historic Camlin, kitty-corner from the Paramount Theatre and not far from the fast growing South Lake Union and Capitol Hill neighborhoods.

Before the recession, a number of high-rises were built in that area, including the Olivian apartments and the Olive 8 Hyatt. Teutsch and John Walker, a partner in Teutsch Partners, and Gary Olmeim, the former executive with Wyndham Worldwide Corp., a hotel and vacation ownership company, paid $2 million in 2009 for the 13,320-square-foot site. That is $150 per square foot.

Seattle-based Teutsch Partners was formed in 1987 as a privately owned commercial real estate services and development company. Its portfolio includes office buildings, industrial parks, retail, multifamily, mixed-use marinas and medical offices.

The team is proposing to use five open web steel trusses from eight to 16 feet deep to span the bus tunnel below and support the building.

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New York Times Wallace Properties Completes Construction of Snoqualmie Community Center
Weekly Market Insight
Inflation, Year over Year

Consumer Price Index for All Urban Consumers

Source: U.S. Bureau of Labor Statistics, Grubb & Ellis

Inflation remains subdued despite an uptick in recent economic indicators such as the labor market, industrial production and even residential construction. The consumer price index was flat in December for a second consecutive month while core prices, which exclude food and energy, rose just 0.1 percent. On a year-over-year basis (see chart), the CPI rose 3.0 percent from December 2010 while core inflation was 2.2 percent, right around the Federal Reserve’s informal comfort range of 2 percent. Even with the improving economy, long-term inflation expectations are low according to the Cleveland Federal Reserve, which says that the public expects inflation to average just 1.39 percent annually over the next 10 years. Low levels of inflation and expected inflation during a period when the economy is improving will provide cover for the Federal Reserve to keep interest rates low and monetary conditions accommodative at least through next year. For commercial real estate, sustained low interest rates should provide some room for capitalization rates to move lower over the next year.

Thomas Jaroszewski| Research Manager | Grubb & Ellis Company
601 Union St Ste 1400 | Seattle, WA 98101 | (: 206.388.3000 | 7: 206.388.3001 | *:E-mail

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About CRE Northwest

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