Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of September 2014.
Seattle office space news in September was dominated by proposed developments. Most intriguing is the news that Amazon is already planning to add to their 3.3 Million square foot campus addition that is currently under construction in South Lake Union. Amazon’s development entity submitted site plans to the city for two new office buildings at 2201 8th Ave (24 stories – 551,600sf) and 2204 7th Ave (6 stories 226,000sf) for a total of 777,600 square feet. The site is currently home to a Cornish College dorm, the Hurricane Café and Budget rental car. This article indicates that Amazon currently occupies 3.7 Million square feet and by 2021 it will occupy 8.2 Million square feet. With all of this construction in the pipeline for Amazon it is comforting that they are looking for innovative ways to be environmentally conscious, including using energy from nearby data centers to heat some of their buildings. The heat will be captured by a 400,000 gallon reservoir and heat-reclaiming chiller plant.
Vulcan Real Estate was extremely active in September working on plans for more office development in South Lake Union. First, Vulcan is proposing a new 12 story office building that calls for 322,127 square feet of office space at 500-534 Westlake Avenue north. The site is currently home to Guitar Center and Uptown Espresso. Next, Vulcan applied for a master use permit for a mixed use development at Westlake Avenue North and Denny way that will include a 41 story apartment building and an 18 story office building with 398,900 square feet. Vulcan’s other proposed office projects in South Lake Union include two six story office buildings at 300 & 333 Eighth Avenue North that will have a total of 388,400 square feet and a seven story 156,000 square foot building on one of the blocks between Westlake & Terry. Aside from office space, Vulcan is also planning to build a lot of apartments closer to Lake Union.
Vulcan and Amazon aren’t the only ones planning on swinging hammers in South Lake Union. Schnitzer West is close to beginning construction on Urban Union, which will be a 12 story office building comprised of 285,000 square feet.
Also, Trammell Crow closed on the 1007 Stewart site in September and is planning a 21 story office tower with 332,000 square feet of office space. Trammell paid $21.8 Million for the half acre site and the development rights equating to $1,050 per square foot! The building will replace the 102 year old-49 unit-Williamsburg Court Apartments.
Finally, Sugar Mountain, the company behind Beecher’s Cheese, is renovating and adding two floors of office space at 2121 Westlake Ave in South Lake Union. Once complete, the building will have a total of ~27,200 square feet and will be the headquarters location for Sugar Mountain.
Outside of South Lake Union, Martin Selig has enough land under contract to build a 185,000 square foot office project at 220 W Harrison in Lower Queen Anne. Selig released renderings prepared by architecture firm Perkins + Will for the proposed six story building.
Although the deal isn’t done yet, the lone exciting lease transaction reported in September was that of King 5 TV moving to Home Plate Center at 1501 First Avenue South. King 5 is said to be close to leasing 70,000 square feet in the 158,000 square foot building near Safeco Field and owned by American Life. King 5 would relocate from their owned headquarters in the South Lake Union submarket.
Skanska USA put the 120,000 square foot office building at 3400 Stone Way on the market for sale in September. Located in the Fremont submarket, the super-green building called Stone34 is the headquarters for Brooks Sports.
Hines and Morgan Stanley reached an agreement in September to partner on the purchase of the 934,000 square foot building at 800 5th Ave from James Campbell Co. The complete ownership structure is unclear as Morgan Stanley is apparently lending Hines $176.1 Million and subsequently Hines has purchased the land for $165 Million. Hines previously leased the block.
Even though Bertha (the machine boring the tunnel that will replace the Alaskan Way Viaduct) is stalled, there are still more than 230 workers on the job. Seattle Tunnel Partners, the team tasked with the entire project, is trying to maintain productivity in a few ways to make up for the fact that Bertha is stuck after travelling only 1,028 feet of the 9,720 route. Bertha is currently scheduled to resume digging in March of 2015 and the expected opening date of the tunnel is November 2016.
Seattle’s housing market always provides an interesting economic indicator. In September it was reported that while the rate of price increases cooled when compared to the same time in 2013 there is still a lack of inventory in the region. With the number of homes for sale dropping, some suspect that prices will drop as buyers are more willing to be patient after a period of frenzied activity in the last few quarters. Still, demand remains strong and part of it comes from Chinese buyers who supposedly represent 40% of the purchases of homes over $1 Million on the Eastside
With the local economy booming, lots of cranes in the ground and transit projects under way, one negative effect is that traffic is seemingly getting worse. This article provides some interesting case studies for traffic in different areas of Seattle at different times of the day.
To wrap up this September post, check out this slide deck showing pictures of a unique office space in the historic Exchange Building.