Seattle Office Space News – May 2013

News

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of May 2013.

BUILDING SALES

Beacon Capital Partners sold the Wells Fargo Center in downtown Seattle for $390 Million to Callaghan Capital Partners out of Chicago.  This sale marks the biggest office investment deal of the year in the region for the 43 story 983,600 square foot building.  The price per square foot for the sale equates to $396.60.

In an effort to expand their local portfolio, Unico purchased the 51 University building from Equity Residential for $32.5 Million.  The sale price for the 96,600 square foot historic building along Seattle’s waterfront equates to $336.43/SF.  Equity bought the building in 2010 for $11.75 Million.  The price jumped 374% during the 3 year timeframe mostly due to the anticipation of the viaduct removal.

A rumor surfaced about Urban Visions buying the  50,350 square foot office building located at 1516 2nd Ave in Seattle. The 97 year old building was the one of the original headquarters for Amazon.

 

LEASE TRANSACTIONS

The anticipated move for Zulily to the Seattle Trade & Technology building at 2601 Elliot Avenue was finally confirmed.  Zulily will lease roughly 220,000 square feet in the building after formerly only occupying 90,000 square feet t 2200 1st Ave S.

Conversely, Real Networks will relocate from 2601 Elliot into 85,000 square feet at the recently developed Home Plate Center across the street from Safeco Field in SODO.

It is expected that NBCnews.com has signed a lease at the Columbia Center for roughly 23,000 square feet.  This would be a relocation for the group currently located within Microsoft’s campus in Redmond.

Finally, IDRI leased 55,000 square feet at 1616 Eastlake Ave E to house lab and office space for 125 employees.

 

PROPOSED PROJECTS

Amazon released further design plans for their new campus development at the South end of the Lake Union submarket.  The newest addition of a trio of domed conservatory type buildings could become a new city landmark.

This article ponders whether Amazon’s business will suffer the ‘campus curse’ that other Silicon Valley companies have suffered after developing major office campuses.

Hunters Capital is the latest developer to plan for office space to be included in a mixed use development on Capitol Hill.  The Capitol Hill market has traditionally not had a lot of office product compared to other Seattle submarkets.

 

SOUTH LAKE UNION

The Seattle City Council unanimously approved the up-zone of Seattle’s South Lake Union submarket allowing for much taller buildings.  This ended an 8 year battle between developers and those hoping to preserve in-city views.  This vote impacts many office development projects planned for the area that will kick off in the coming years.

 

ARENA PROPOSAL

There was lots of drama unfolding regarding Chris Hansen’s bid to buy the Sacramento Kings and develop a new arena in the SODO area.  First, Hansen increased his offer by $75 Million in anticipation that the NBA would not approve the relocation.  The NBA voted to reject Hansen’s offer anyway and this article provides an explanation by NBA commissioner David Stern.  Reactions from Hansen, the Longshore Union and Paul Allen followed.

Subsequently, the Maloof family agreed to sell the Kings to the Sacramento Group who Hansen competed with.

With no team on the near horizon, Hansen indefinitely postponed a design meeting for the proposed arena.

 

OTHER NEWS

This article further identifies the trend in Seattle that the best buildings and locations have relatively tight vacancy rates across commercial real estate sectors.

Here are a couple of articles about the machines and materials to be used for the upcoming tunnel to be constructed replacing the Alaskan Way viaduct.

Seattle was ranked the 23rd best market in the country by On the Numbers, which is a monthly measure of economies.

Finally, there was more press in May about the one year anniversary for space sharing incubator SURF.  SURF leases office space to early stage startups in a shared and collaborative environment.

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