Seattle Commercial Real Estate News of the Day

Thursday, January 26, 2012

Seattle Times Daily Journal of Commerce Headline
‘Mercer Mess’ to get even messier

Real Estate Buzz: Owners weigh options on Aspira sale

Skanska buys SLU parcel Real estate watchers have been waiting for the sale of the Aspira apartment tower in downtown Seattle, but now there’s talk it won’t be sold despite rumors of an eye-popping offer.

Aspira is at 1823 Terry Ave. and is owned by a partnership of Urban Partners of Los Angeles and Seattle, and O’Connor Capital Partners of New York.

When asked about the rumors this week, Ron Merritt of Urban Partners said, “I couldn’t really say that’s entirely accurate.” He said the owners are still talking to Jones Lang LaSalle broker David Young about their next move. Young leads the team that has the listing.

Merritt referred further questions to Urban Partners Principal Matt Burton, who did not return a call yesterday, and Young declined to comment.

One source who said he has only second-hand information said the best offer for the 325-unit tower came in at about $155 million, or around $555 per rentable foot. That’s higher than the replacement cost, so the source said a sale at that price could unleash a wave of high-rise apartment construction.

When the tower hit the market last fall occupancy was 86 percent and rents were about $2.85 per square foot, according to Young. He expected occupancy in the tower would top 90 percent by now.

Developers, including Urban Partners, already are building some high-rise apartments and planning more. Urban Partners is teaming up with Goodman Real Estate on a 24-story project on Second Avenue across from the Moore Theatre.

Last fall, Goodman Chief Investment Officer Don Fosseen said construction of that 249-unit tower would start this quarter. The overall cost is more than $100 million. Weber Thompson is the architect, and Turner Construction is the contractor.

Goodman renames Colman Tower

Speaking of Goodman, the company’s Colman Tower apartment project in Pioneer Square has a new name: The Post.

Colliers International broker Jason Miller said he and Damian Sevilla have been retained to lease nearly 9,500 square feet of retail at the base of the 16-story, high-end complex that is under construction between Western and Post, and Columbia and Marion.

Two of the retail spaces are on Western, and another one faces the pedestrian overpass leading to the terminal for the Bainbridge Island and Bremerton ferries. Those runs carry more than 8.5 million people a year, and many of them use the walkway, especially during rush hour.

Asking rates for those retail spaces in The Post are $24 a foot, plus utilities and other expenses.

Two other retail spaces in the building are tucked away on Post, which makes them intriguing. Though it is called Post Avenue on maps, Post feels more like an alley. To confuse matters, the portion of Post by Pike Place Market is officially an alley. Avenue, alley? Let’s not get bogged down, OK?

Anyway, we were talking about the retail on Post, which is busy for an… uh, side street, thanks to the Owl N’ Thistle Irish Pub in the back of the Colman Building. Goodman’s retail spaces along Post are available at $20 a foot, plus expenses.

For several years, Goodman officials have talked about bringing more life to Post. One idea is to replace the asphalt with paving stones and string lights overhead. Another pub or restaurant would add to the mix.

Condo sales by the numbers

On the condo front, two Seattle projects — Enso and Gallery — finally sold out. Bellevue Towers closed 144 sales last year. And, according to brokers at Realogics Sotheby’s International Realty, a total of 128 units sold in three towers: Fifteen Twenty-One Second Avenue, Escala and Olive 8.

We wondered about prices. According to information provided by Bellevue Towers, average per square foot prices in Seattle through the first 11 months of last year were: $856 in Fifteen Twenty-One; $582 in Olive 8; $569 in 200 West Highland; $557 in Enso; $528 in Escala; and $414 in Gallery.

In Bellevue, square foot condo prices were $504 in One Main Street; $493 in Washington Square; and $412 in Bellevue Towers.

Is Penney still interested?

Broker Maria Royer of Real Retail gave an interesting presentation about downtown Seattle at last week’s NAIOP meeting.

She said several large national retailers are looking at the Second and Pine space that soon will be vacant when Nordstrom Rack moves to Westlake Center.

We asked after the meeting whether J.C. Penney is one of them, now that Penney reportedly has shelved plans for a new store in the Kress Building at Third and Pike. Royer wouldn’t comment.

We’ve been tracking the Penney story for months. Penney has refused to comment. Retail Opportunity Investments Corp. now owns the Kress and its website still shows Penney as a tenant in the building.

City records tell a different story. Last summer, Callison Architecture applied for a construction permit to convert the space from a gym into a new Penney store. No permit has been issued. In October, the Seattle Department of Planning and Development sent Callison a “correction letter.” A spokesperson said DPD would continue processing the application once the corrections were made.

As of yesterday, no one has responded to the letter.

A different kind of real estate redemption

First his company auctioned a notorious strip club. Now it’s auctioning a church.

Northwest Auctions Partner Paul Thomas said he hopes auctioning the partially built South Seattle church will “help balance the scale” after last summer’s sale of Rick’s Night Club in Lake City.

Authorities seized Rick’s as part of a racketeering investigation of the now-deceased Frank Colacurcio Sr. It was sold for $2.35 million and a new club called DreamGirls Ricks opened in the space.

“Our company sells all sorts of real estate,” said Thomas in a press release, “but we never anticipated selling a strip club. While that auction was very successful, one does wonder about the impact on good karma.”

The church is on Cloverdale Place South off of Rainier Avenue. Construction on the 4,000-square-foot structure stopped several years ago when the pastor died. Thomas said it could be easily modified for housing or commercial uses.

The auction will be Feb. 1 and bidding starts at $330,000.

“We will be particularly pleased if the property is used in a way that benefits the community, such as a church, teen center or homeless shelter,” said Thomas. “Anything but a strip club!”

City University’s HQ moving to Belltown
Puget Sound Business Journal
Wash. in top 10 on business-friendly taxes, women’s salaries
Job growth attracting universities to SLU
Boeing workers get big incentive bonus
Seattle-PI.com
Boeing 4Q profit up as plane deliveries take off
Rate on 30-year fixed mortgage rises to 3.98 pct.
Penney shares soar on upbeat outlook for 2012
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Skyway Luggage building sold for $2.1M
Good Signs for the Office Sector
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About CRE Northwest

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