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January 9, 2015

Clise plans 2 towers on 7th Avenue site

By LYNN PORTER
Journal Staff Reporter

Clise Properties is planning two high-rise towers with 900 housing units on Seventh Avenue between Bell and Battery streets.

Seattle architecture firm Graphite Design Group is working on the project, which would have 880 parking spaces, according to information from the city.

Zoning allows residential buildings of up to 400 feet on the site under certain circumstances. The property is now occupied by parking, a transmission shop and a car rental “hut.”

Clise declined to comment on the project.

The site at 2301 Seventh Ave. is across the alley from Antioch University, and in the Denny Triangle neighborhood where Amazon.com is constructing more than 3 million square feet of office space.

Clise sold Amazon that land, and Amazon has an option with Clise to buy more property nearby.

Since Amazon's announcement, the neighborhood has seen a wave of new housing development.

A number of high-rise apartment projects — and one condo development — have been built or are in the pipeline, including a high-rise apartment building Graphite is designing for Clise at 2202 Eighth Ave.

Clise has not indicated to the city if the Seventh Avenue project will be apartments or condos, but few condo developments have been proposed locally.

Brian O'Connor, principal with O'Connor Consulting Group, said he would be surprised if it's not apartments.

“It's pretty much all apartments (being built downtown),” he said. “The condos are so few and far between that they're insignificant. That's because apartments make more money than condos ... with less risk.”

Jon Hallgrimson, an executive vice president and multifamily specialist with CBRE, said Clise's Seventh Avenue site is “right in the center of what's going on.”

“There's a lot of cool things happening there,” he said.

That includes Amazon.com's expansion and speculative office buildings being constructed nearby. “It's where all the jobs are.”

Hallgrimson said Clise's project is one of the bigger multifamily developments planned for downtown, though some others of similar scale are in the pipeline.

Apartment vacancy in Seattle is 2.7 percent, said O'Connor, whose Seattle firm specializes in market and feasibility studies for multifamily housing.

He said there are 43 high-rise apartment projects in the pipeline for downtown: two were just completed, five are under construction and the others are proposed.

“New ones are popping up all the time,” he said, because people want to live in Seattle.

In 2012 and 2013, Seattle captured 35 percent of new jobs and 72 percent of the region's apartment demand, he said. The Eastside captured 33 percent of new jobs and only 13 percent of the apartment demand.

O'Connor said he expects millennials will keep driving Seattle's apartment market for the next few years at least. The median age of millennials in the city is 25, and he said this cohort tends to put off buying housing until they hit their mid-30s.

Much of the apartment demand in the region is centered on Seattle: A total of 11,850 apartments were rented in King and Snohomish counties in 2014, and O'Connor said 7,800 of them were in Seattle.

For each of the next two years about 10,000 apartments are planned for King and Snohomish counties, he said, and “that's basically what our demand is.”

O'Connor said a project near Amazon.com's headquarters is easier to sell to investors.

“It's all about the Amazon story,” he said.

Clise has also filed plans with the city for an 11-story data center at 2229 Sixth Ave., on a parking lot next to Blanchard Plaza.

The company was founded in 1889 and started buying land following the Great Fire. The Clise website says its second-generation leader, Charles Clise, saw long-term opportunities in the Denny Triangle and began assembling properties.

Since 2012, Clise has sold four blocks in the Denny Triangle to Amazon.com for nearly $260 million.


 


Lynn Porter can be reached by email or by phone at (206) 622-8272.


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