December 7, 2006

Twin condo towers due for Denny Regrade site

Image courtesy Perkins & Company Architecture & Urban Design

Embassy Development is the general contractor. Vancouver B.C.-based Perkins & Company Architecture & Urban Design is designing the full block project.

British Columbia-based Embassy Development Corp. plans to start construction next fall on the first of two 40-story condo towers in the Denny Regrade, a bullish move in a market that will see an influx of condos in the next few years.

The Burnaby, B.C., company intends to build the towers on a full block between Fifth and Sixth avenues and Battery and Bell streets. The complex will have a total of 643 units.

Company President Ryan Bosa estimates it will take 29 months to complete the first tower. Ideally, construction on the second will begin a year after the first, and have the same schedule, he said.

“I am very excited about the Seattle market,” said Bosa. He said he doesn't think there will be too many condos when the project is complete.

“Given what I know is coming on the market — and I know there's quite a bit — I am not concerned at all,” he said.

Embassy is the general contractor. Vancouver B.C.-based Perkins & Company Architecture & Urban Design is the architect.

The first tower will have 12,500 square feet of ground floor retail. The second will have nearly 16,000 square feet of retail. There will be 960 parking stalls in nine levels, two below ground and seven above.

The towers will be sleek with lots of glass and thin floor plates, making for “significant” views, said Andrew Lisson with Perkins. Some of the lower floors will have condos that screen parking.

The seventh floor will have a deck with a pool, kitchen, lounge and fireplaces. Each tower will have a top-floor deck with a bar/lounge. The project will also include a fitness room.

The design will promote energy conservation and will have a linear park along Bell Street, said Lisson. It is going for silver LEED.

The units will be 850 to 2,500 square feet, averaging 1,300, said Bosa. Most will be two-bedrooms. Prices have not been set.

Target buyers are young professionals who walk to work and empty nesters working downtown, Bosa said.

Retailers might include a grocer, coffee shop, wine store or dog groomer, said Bosa.

Embassy is under contract to buy the site from Seattle-based Clise Properties, he said. The property is now home to Teatro ZinZanni performing arts group, which is slated to move.

About 6,700 residential units, mostly condos, are planned for or under construction in downtown, said the city's Department of Planning and Development spokesman Alan Justad. That total doesn't include units in South Lake Union, Uptown, Pioneer Square or parts of Belltown.

Brian O'Connor, principal with Seattle-based O'Connor Consulting, said that as of November, 1,700 condos (including 900 converted units) have sold in greater downtown Seattle.

His firm estimates that 2,200 condos will hit the market in 2007 and 1,700 in 2008, with demand for 1,900 units both years. That estimate includes mostly new construction, he said, as it's difficult to predict condo conversions.

O'Connor believes demand will plateau because of rising prices. To be financially viable, a 1,000-square-foot new unit must be priced at $750,000, whereas four years ago it was $550,000, he said.

“I think we're getting to a point where price matters,” he said.

While an unknown number of conversions may come on the market, they are usually not of the same quality as new towers and thus can't compete, he said.

Dean Jones, principal with Realogics Inc., which does market research, design, marketing and sales for condo and mixed-use properties, estimates that in the greater downtown area, including South Lake Union, nearly 1,000 new residential units, mostly condos, will be completed in 2007. About 2,000 will be built annually from 2008 through 2010. He believes the market can absorb 2,500 units a year.

“The demand will outnumber the supply for at least the next several years,” he said.

He predicts condo prices won't decline at least through 2010, given strong job growth, in-migration and the desire for city living.

“People are not buying because they have to because of a job,” he said. “They're buying because they want to.”