Friday, February 10, 2012
|Seattle Times||Daily Journal of Commerce Headline|
|With new CEO, JC Penney pulls plan for downtown Seattle store||
Real Estate Buzz: Nordstrom wants more room to grow
|UW opening incubator facility for startups||Nordstrom is on the hunt for more office space. Despite our best efforts we can’t tell you much about it, but we can report the retailer is leasing 28,000 square feet of space in Sodo to expand its catalog photo studio.
“Every pair of shoes has to have a picture taken of it,” says John Bredvik, manager of a limited liability company that owns the 6th & Holgate Building, where Nordstrom is moving. Moe’s Home Furniture Collection was in the space but is moving to Tukwila.
Broker Jim Kidder of Kidder Mathews negotiated the deal for the 6th & Holgate space, and Jim Kinerk of the Broderick Group represented Nordstrom.
Nordstrom, which has 5,000 employees in Seattle, is on a roll. Sales last year were nearly $10.5 billion, up 12.7 percent, and the online business is growing rapidly. The company occupies more than 1 million square feet of office space in five downtown buildings and brokers say it is looking for more: up to 240,000 square feet. Nordstrom is working with Washington Partners to find the space.
Nordstrom spokesman Colin Johnson would only say they are looking at “different options downtown to accommodate our future growth needs.” He wouldn’t say how much or comment on particular properties.
Developers are thinking Smart
Unless you’re in the market for a new Mercedes, the news that the Phil Smart dealership was sold probably didn’t pique your interest much. But if you’re a developer eager to find a good-sized site on Capitol Hill, well, that’s a car of a different color.
Phil Smart Jr. says his family plans to sell most of a block in the Pike-Pine corridor. Pete Sheltonof Cushman & Wakefield|Commerce has been hired to market the property.
Last week, the company that helped Smart sell the dealership announced the new owner is renaming it Mercedes Benz of Seattle, and will soon move it to a state-of-the-art facility planned for Airport Way in Sodo. The dealership’s used-car sales center already operates there.
Smart opened at 600 E. Pike on Capitol Hill in 1959. Today, the dealership occupies just over an acre. The site is zoned for buildings up to 65 feet tall, but it appears at first blush that a development company could go 10 feet higher if it incorporated Smart’s former showroom into a new project.
The property is in the Pike-Pine Conservation Overlay District, and the showroom and other structures on the block are classified by the city as “character structures” (read old buildings), which are prized because they give Pike-Pine its, well, character.
Pike-Pine was Seattle’s original auto row. As dealerships left and other changes occurred, people in the community raised concerns that the history and culture that have made the area such a draw would be lost.
The city responded with new rules and financial incentives designed to preserve older buildings. You can read about this at http://tiny.cc/lucoh.
7.5% cap for Eastside deal
Using an SEC filing and other documents, we’ve pieced together more details about Griffin Capital’s recent $40 million acquisition of Willows West Technology Center, an office and data center campus occupied by AT&T Wireless. We first reported the sale a week ago.
The price is $9 million less than what the seller, Arden Realty, paid for the three-building, 155,830-square-foot complex in 2007, at the height of the market. The property is at 14500 N.E. 87th St.
Griffin scored a sweet deal thanks to a long-term lease with AT&T. The lease expires in 2019, and the company has four, five-year extensions. Rent is $19.25 per square foot, plus expenses, with several step increases topping out at $22.25 a foot in 2017.
Griffin’s initial cap rate, or return on investment, is approximately 7.5 percent.
AT&T Wireless and its predecessor companies have continuously occupied the property since it was built in 1995. Over the last three years, it’s estimated that AT&T spent more than $50 million of its own capital on upgrades to what is its “next-generation” research-and-development facility.
AT&T plans to invest more in the property in the near future.
Los Angeles-based Griffin bought the property for Griffin Capital Net Lease REIT. This is Griffin’s first acquisition in the Pacific Northwest. Michael Escalante, Griffin’s chief investment officer, said the company is “absolutely interested” in buying more here.
Eastdil Secured brokers Jason Flynn, Stephen Van Dusen and Jeffrey Weber marketed the property for Arden.
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