June 8, 2000

Real Estate Buzz

What structure costs $1,714 a square foot?

It's time to do the EMP numbers.

To those who thrill in these things, the stats on Paul Allen's soon-to-open Experience Music Project music museum at Seattle Center are as wild as its swoopy architecture.

The raw EMP data: $240 million total cost; $100 million for constructing just the building's shell; 140,000 gross square feet.

Thus, the shell structure cost $714 per square foot to build.

The grandest office skyscrapers in town cost $225 to $250 to construct. And that's per rentable square foot, a smaller number than gross square feet.

The $240 million total cost includes equipping the interactive museum with state-of-the-art technology. For the sake of dazzlement, call that tenant improvements of $140 million, or $1,000 per square foot.

Total cost per square foot: $1,714. Cha-ching.

Hines takes Langly's option

Langly Properties confirmed it assigned its option on a downtown Bellevue development site to Hines.

Federal Way-based developer Hong Tan of ST Corp. owns the 2-acre site at Northeast Fourth Street and 112th Avenue Northeast. Hines, a large Texas-based developer, last week said it has begun planning to build a 280,000-square-foot, mid-rise office building on the site

Hines calls the project 112th@4th, following a naming scheme begun with Hines' first near-downtown Bellevue project: 112th@12th.

The Daily Journal of Commence last week reported that Langly Properties appeared to hold an option on the site, and thus Hines would need a deal with Langly, but the Bellevue-based development firm couldn’t be reached in time for that story.

In an interview this week, Langly executive Russ Keithly said Langly has assigned its option to Hines, which has a "substantial" amount of time to exercise the option.

Tan bought the site from Puget Western Inc. a couple of years ago with a plan of building offices and hotel there. Keithly said Langly stepped in last year, taking an option from Tan on the notion of constructing a 270,000-square-foot office building there.

Langly couldn’t arrange financing, though, Keithly said, so in steps Hines, one of those nationwide developers that can finance projects of this sort itself.

Hines’ plans so far are "very similar" to Langly’s except Langly envisioned two small office "towers" extending out of a podium while Hines envisions one "tower" atop a podium, Keithly said. Hines’ project would total eight stories.

Curtis Beattie & Associates drew the architectural plans for Langly’s proposal; Hines hasn’t said whether it will use a different architect.

Hines’ proposal will compete with up to eight others in a crowded race to build the next wave of downtown Bellevue office structures, with at least three competitors having a jump start on Hines, so it’s by far not certain that 112th@4th will get built. The city of Bellevue said it expects Hines to begin the lengthy permitting process this summer.

So what will Langly do?

Langly, meanwhile, has two apartment groundbreakings next on its itinerary.

The firm, headed by Lang Sligh, expects to start construction in the coming months on an innovative set of apartments atop the Overlake Park and Ride lot in Bellevue’s Overlake area and one in Portland that’s the second phase of a Langly project there.

And what about Hong Tan?

Moving to ST Corp.’s other doings, Tan owns one other 2-acre downtown Bellevue development site and has that under contract to sell, too.

The property, at 112th and Northeast 10th Street, is in the rapidly coalescing apartment and condo sector along downtown’s north edge, clustered around the King County Library.

Tan, who came into the business building single-family subdivisions in the Kent Valley and has yet to develop a central business district-style project, pursued a multifamily project on the Bellevue site while receiving numerous inquiries from other developers eager to take it over.

ST’s chief financial officer, Mark McKallor, said a multifamily developer has put down a non-refundable deposit to buy the site. He wouldn’t identify the developer, who thus couldn’t be contacted to determine whether the project might be called 112th@10th.

Trivista site heats up again

Previous proposals for the full-block, downtown Bellevue "Trivista site" were huge. The newest one, by Madison Homes, is huger.

The last plan, by Vancouver, B.C., developer Nat Bosa, called for three roughly 25-story condo towers totaling slightly over 600 units.

Vancouver-based Madison, which bought the Trivista site last year, recently began the permitting process to make it four towers totaling around 800 units.

The site is on Northeast 10th Street between 106th and 108th avenues northeast.

Crown West tries spec warehouse

Crown West Realty started constructing a spec industrial building in the Spokane Business and Industrial Park and plans to follow that with another spec warehouse.

Construction began on a 100,000-square-foot, concrete tilt-up structure that Crown West executive Brent Long described as "super-flexible and efficient."

Later this month work will begin on a 32,000-square-footer where Crown West has its office at the entrance to the park.

The park totals 600 acres on which 96 buildings have been constructed totaling 4.5 million square feet. About 5,000 people work there, according to Crown West.

Paul Allen scores again

Paul Allen’s latest South Lake Union purchase: a small plot at Eighth Avenue North and Harrison Street from David and Lin Mitchell, according to King County property records.

The Microsoft co-founder paid the Mitchells $1.65 million for the property at 815 Harrison St., records show. The Mitchells bought the property in February 1993 for $242,000, in case you needed more data about how much prices have skyrocketed.

Allen’s Vulcan Northwest has been steadily accumulating South Lake Union properties as they become available since 1996. The collection now exceeds 25 acres.

Allen’s representatives couldn’t be reached for more details about the Mitchell property; they’re likely pretty busy on the upcoming opening of the Experience Music Project.

Millennium topping out

Martin Smith Inc. and Beacon Capital will top out construction of Millennium Tower in downtown Seattle next week. Millennium will have 22 stories of offices and condos in the city's Financial District at Second Avenue and Columbia Street.

Martin Smith has yet to name whatever tenants it has signed to the 180,000 square feet of offices but says interest has been as strong as everywhere else downtown.

Hines closes on IDX site

Also at Martin Smith, a partnership led by the Seattle real estate firm’s principals this week finished selling the IDX Tower site and plans to the big Texas developer Hines for $35 million.

The 40-story tower may start construction this fall. The high-tech company IDX Systems Corp. in April leased a whopping 324,000 square feet in the 810,000-square-foot structure, the name of which changed from Madison Financial Center to IDX Tower.

The financial district site is three-fourths of the block bordered by Madison and Marion streets and Third and Fourth avenues.

Hines agreed to the $35 million pricetag for the 43,760-square-foot site and development plans a year ago. The price equals nearly $800 per square foot of land. Martin Smith principal Greg Smith said Hines bought everything, taking full control of the project. Martin Smith conceived it, leased it and now it’s Hines'.

Previous columns:

• Real Estate Buzz, 06-01-2000
• Real Estate Buzz, 05-25-2000
• Real Estate Buzz, 05-18-2000
• Real Estate Buzz, 05-11-2000
• Real Estate Buzz, 05-05-2000
• Real Estate Buzz, 04-28-2000
• Real Estate Buzz, 04-21-2000
• Real Estate Buzz, 04-14-2000